Cheap Natural Gas Is A Thing Of The Past
The era of cheap natural gas might be gone for good. U.S. natural gas futures climbed to a 31-month high of 4.16/MMBtu on Thursday thanks to forecasts for hotter weather over the next two weeks and soaring global gas prices ensuring that U.S. liquefied natural gas (LNG) exports will remain at record highs.
Refinitiv has projected that average gas demand, including exports, will climb from 90.9 bcfd in the current week to 94.5 bcfd next week as cooling demand keeps rising. Next week’s forecast is actually lower than anticipated because some power generators will be forced to burn coal instead due to increasingly high natural gas prices.
But that won’t be on a big enough scale to stop the natural gas march. Cheap natural gas is fading!
And that’s great news for U.S. LNG. Between January and June 2021, U.S. LNG exports made a jump by 42% Y/Y to an average of 9.6 billion cubic feet per day (Bcf/d). This is comparable with the first half of 2020. Asia is still the top buyer of U.S. LNG, accounting for 46 percent of exports through the end of May.
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Source: Oil Price
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