The Rising Production Rate Among the Enterprises Cooled the Global Natural Gas Prices
- 26-Sep-2022 3:52 PM
- Journalist: Nicholas Seifield
Hamburg, Germany- U.S. Natural gas costs have hit low compared with the past few weeks, as the market has lost momentum because U.S. production for Natural Gas is operating at the rate of 100 Bcf/day for the first time. The odds are now that adequate U.S. production will be sufficient to meet local demand in the upcoming months before winter shows up. Costs will probably stay depressed except if there is a breakout of storm activity in the Gulf of Mexico, which could disrupt production. On 25th Sept, the price of Natural Gas in the USA slipped to USD 6.82 per MMBtu.
European Natural gas benchmark prices continued to stay depressed as the energy market is improving and the storage levels are nearly 90%, thus giving the chance of overcoming the need for Natural Gas in the upcoming winters. The Natural Gas futures for delivery to other European regions decreased by USD 4.18 to a weekly average of USD 56.63 per MMBtu.
With the week ending on 23rd Sept, the Henry Hub spot prices also fell with deterred benchmark futures. As the Natural gas price is still on the higher end, European steel and Chemical producers are shifting operations to the U.S., aiming to relieve the jump in the regional energy prices. The energy prices in the U.S. are stable, and the government has signed a law to support renewable energy projects.
According to ChemAnalyst, the price of Natural gas in the global market will depress further in the wake of the rising production rate among the significant manufacturing units. Rising inventories of Natural Gas among the storage units further decrease the downstream derivative market. Energy values in the U.S. will decrease, which will soften the prices of Petrochemicals. For Europe, high deliveries of Liquefied Natural gas (LNG) will cushion the costs, with the recent Eemshaven LNG terminal boosting Europe's ability to import cargoes.