September 16, 2021

Natural-Gas Market Conditions Look Unnatural

Natural gas could really use an OPEC-style, coordinated production ramp-up right now.

U.S. Henry Hub natural-gas prices, at around $5 per million British thermal units (MMBtu), have more than doubled from a year earlier. When the benchmark broke the $4 mark in early August it was a rare milestone—especially so far ahead of the winter heating season. The sticker shock is even greater elsewhere in the world: East Asian benchmark futures are four times where they were a year ago, while European natural-gas spot prices are five times as high. Both benchmarks have exceeded $18 per MMBtu.

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