The value of U.S. natural gas has reached a maximum for 14 years, equaling to $10 per MMBTU. The quotes are primarily affected by fears about global fuel reserves being scarce.
Supplies are worrisome specifically in the U.S., where abnormally hot summer coupled with increased demand for electricity has come into play. Thus, gas exports to Europe are also questionable. The region has been mainly dependent on gas deliveries from other countries.
The major Nord Stream pipeline in Germany will suspend shipment due to maintenance, as of August 31. Rising concern is the fact that gas transit won’t be resumed as scheduled.
Production at shale deposits in the United States keeps growing steadily if only modestly. Exports declined after an explosion at a key shale field in Texas back in early June. The facility will resume operations by October. So, restoring export capacities is also expected.
Previously, as gas tariffs soared, power plants could switch to coal. This method is less and less common due to climate-related challenges. That implies conventional demand that serves to preclude gas futures from hiking has been basically dropped.