Natural Gas Futures

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Important events

Jul 012022

America’s getting too gassy

Energy commodities didn’t have the hottest June, and for natural gas it looks like July may not be all sunshine and rainbows either.

  • US natural gas futures fell 16.5% on Tuesday in their worst day of 2022 so far, closing June with a 33% loss – its worst month since December 2018. There are a couple of factors at play here, but one of the most influential ones is new developments from Freeport LNG.
  • It comes down to an oversupplied market. Freeport is responsible for almost a fifth of all US LNG exports, and it’s been shut down since a fire a few weeks back. It was due to reopen this week, but didn’t get the sign off from pipeline safety regulators. Now, all that LNG that isn’t being exported is hanging around causing high inventories in the US.
  • Energy commodities in general had their worst month of the year in June as the market digested the rising chance of recession, though commodities have still by far been the best performing asset this year. With the war in Ukraine persisting, it doesn’t look like global shortages will be over any time soon, so we’ll be closely watching how H2 turns out.
American Public Power Association / Unsplash

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Jun 152022

Natural gas excretes gains

Natural gas gets handed a double blow from both sides of the Atlantic, causing prices to somewhat evaporate.

  • US natural gas futures cratered 16.5% on Tuesday for its worst day of the year, closing at its lowest levels since May 9 – though prices are still up just under 90% since the beginning of the year as the commodities market goes bananas. The downturn came after the industry got a double whammy of bad news.
  • A major liquefied natural gas export terminal will be offline for at least three months following a fire last week. Freeport LNG accounts for a fifth of US LNG exports, and without those exports there’ll now be an oversupply of LNG in the US market. Europe on the other hand, who’s a main recipient of these exports, ain't feeling great.
  • Europe got handed another bout of bad news on Tuesday when Russia said it would reduce capacity on the Nord Stream 1 pipeline to Germany by around 40%, blaming the reduction on sanctions against Moscow. This twin threat on gas imports leaves the continent in a vulnerable position to supply disruptions, so everyone will be working even harder to reduce its reliance on Russia.
Jun 062022

An odorous exchange

Crazy high natural gas prices continue to cause economic turmoil as big dog CEOs voice their concern for what’s to come.

  • The price of US natural gas is up 8.43% for June already, hovering around the $9 mark to mark a pretty serious jump from its $3 per gallon price tag at the start of the year. Concerns continue to grow around whether depleted reserves will be replenished before winter, with June gas contracts coming in waaaay higher than usual.
  • Biden says there’s not much he can do about it, instead focusing his strategy on allowing the Fed to freely hike rates as they see fit to control sky-high inflation. The energy crunch has been aggravated by the war in Ukraine, meaning the US is also having to share its gas with buyers in Europe and Asia who are even more desperate.
  • Will things get better soon? Well, if the world’s CEOs are to be believed – no. JPMorgan’s Jamie Dimon warned people last week to “brace yourselves” for an economic “hurricane”, an opinion shared by a bunch of others – of 133 CEOs asked by a business research group, the majority believe a recession to be on the way.
Marra/ Unsplash