Natural gas futures spiked to settle at the highest settlement price in the last 12 years in New York. Meanwhile, five European countries also called for an investigation into the unprecedented hike in gas prices in Europe.

Gas futures increased by 9.5% to close at $6.312 per million British thermal units on the New York Mercantile Exchange as concerns regarding gas shortages in the US are escalated by the global gas supply shortage.

As the winter season approaches closer in the northern hemisphere, insufficient U.S. auxiliary supplies are sparking concerns regarding potential shortages. While demand for furnace fuel rises, gas futures have jumped to the highest price since December 2008.

Head of North American natural gas analysis at research firm Energy Aspects Ltd. Nina Fahy says that brokers and traders are “definitely considering that there’s a high potential for the market to have to move into what we would call gas-rationing pricing which simply is that you basically have to preserve gas in your inventories to meet deliverability needs”.

People are bracing for a brutally cold winter as US supplies deplete even though there have been mild weather forecasts for the winter season.

The Bloomberg Commodity Spot Index jumped to an all-time high on Monday as the demand for raw materials strikes with limited supplies throughout the world. The situation is even worse in Europe and Asia, where the prices for gas and power touched an all-time high.

Gas prices in the UK soared to a new high of almost $42 jumping by 23% on Tuesday.

Gas production levels in U.S. fields, excluding Alaska, plunged around 91.2 billion cubic feet on Tuesday. Based on reports, this is the lowest since the beginning of September. As per government figures, nationwide inventories that have been held in storage to supplement pipelined supplies during the winter season are 15% lower compared to the previous year.

Record-high prices in Europe

Bloomberg journalist Javier Blas tweeted a joint statement issued by a group of five EU nations comprising of France, Spain, the Czech Republic, Romania, and Greece. The statement calls for an investigation into the reasons behind the record-high spike in gas prices across Europe. It says, “Regarding gas, the functioning of the European gas market should be investigated to understand why current gas contracts have been insufficient.”

The aforementioned countries have further suggested the development of a framework regarding common gas purchase rules to alleviate dramatic hikes in gas prices. The statement further urges greater coordination in gas procurements in order to increase common bargaining power.

The document calls for restructuring at the wholesale electricity market of the European Union for the purpose of establishing a better link between the price being paid by the consumers and the average production cost of electricity.

The document reports that it is a joint statement from the ministers of economy and finance of all five nations. The published copy is not dated.

On October 5 the gas price trading in Europe set numerous historical records. The price exceeded $1200 per 1000 cubic meters at the opening on Tuesday and it jumped beyond 1,455 per 1,000 cubic meters by evening. The price went up by a whopping $250 during one trading day.

Earlier Gazprom Board Chairman Alexei Miller said that the holdup in gas injection into European underground storage facilities and the mounting demand for gas has resulted in record prices.


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