Natural gas stockpiles for winter are currently more than 10% below normal levels for this point in the year. Domestic gas output has fallen by 1 billion cubic feet per day from a peak of 98.7 billion earlier in August. US gas supplies could be further drained when the Freeport LNG export hub partially reopens in October. Loading Something is loading.
While Europe scrambles to stock up on natural gas for the winter, the US could face its own energy crunch as production and storage lag.
According to data compiled by Bloomberg, US gas stockpiles for winter are currently 10% lower than normal levels at this point in the year as a heatwave boosts demand for cooling electricity.
At the same time, total domestic gas output has declined by 1 billion cubic feet per day from a peak of 98.7 billion cubic feet per day for the week ending August 6, BloombergNEF data show.
The US heating season is just two and a half months away. But that will coincide with the partial reopening of the Freeport LNG export hub in October. When it comes back online after a fire shut it down earlier this year, it could siphon off US gas supplies as Europe grapples with an energy crisis.
Buyers in Europe are willing to pay as much as seven times the US selling price for natural gas. Benchmark prices in Europe have soared 12% in August alone, equaling $67 per million British thermal units. That compares with the US price of about $9 per million BTUs, which is already near 14-year highs.
Russia’s cuts to European gas deliveries have roiled global energy markets, triggering a worldwide race to secure enough supplies before winter.
The US has already replaced Russia as Europe’s top gas supplier. And buyers in Asia have also stepped up gas purchases, anticipating massive demand from Europe as it seeks alternative sources. On Tuesday, Asia’s benchmark spot LNG price jumped to nearly $60 per million British thermal units.
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