With the historical heatwave sweeping across the nation, the energy demand for this summer has reached a multi-year high. A large number of power plants still use natural gas as their fuel to generate electricity, so the demand for natural gas has been driven up as well. On top of that, nations have also begun to purchase natural gas to fill out their reserves for winter use, as natural gas is a major source of energy and heat during winter times. Buyers are undeterred by high spot prices even though it means a loss for them.
With Asian spot LNG prices climbing to multi-year highs, producers are more willing to sell to the Asian market instead of the US market to maximize profit. This, combined with record-low storage levels, summer maintenance outages and record-high carbon prices, created a perfect scenario for natural gas prices to skyrocket in multiple markets. The supply capacity is unlikely to change by significant margins, which means the natural gas price will stay high for the foreseeable future.
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