Liquified Natural Gas Prices in The US are soaring, why

The price of Liquified Natural gas has been rising to a 13-year high during spring 2022, the demand for fuel usually dips in spring season but this year’s high heat conditions across the country has increased the demand for cooling equipment fueled by LNG. The current weather condition is the primary reason behind the increasing demand and price of Liquified Natural Gas in the US. Domestic utilities in the country usually switch to coal for energy when the gas prices are high, and they are not able to do so because, in the current condition, the coal prices in the United States are as high as gas prices in the US. Usually, the demand is dull in the Summer Months, but this year increased heat condition, especially in the first week of June, is likely to impact natural gas price, inventories, and demand like the winter months do.

As countries strive to ensure they have enough reliable energy in the aftermath of Russia's invasion of Ukraine, the gas market is engulfing the frenzy that has gripped the oil, fuel, and coal markets. Russia is the world's largest petroleum and gasoline exporter and the world's largest natural gas exporter. The United States has been stepping up exports to the European countries to help them relieve their dependency on Russian oil and gas. This decision to export natural gas to Europe has resulted in higher prices of natural gas in the US domestic market. The inventory has been declining so low in the US that gases set aside to be used in the winters are currently being used under the current market situation.

According to ChemAnalyst, the price of the Liquified Natural gas in the US is rising drastically from the start of the second quarter of 2022 on the back of a relatively hotter summer and an increase in exports to European countries to aid them in recovering from the conflict between Russia and Ukraine. The rising price trend of LPG in the US market is expected to continue throughout the third quarter of 2022.