The price of natural gas has doubled in the United States over the past year.
A 100% increase is not good, but some parts of Europe have seen a 500% spike. The expectation this winter is for some European countries to face gas shortages.
“A particular concern is how this will impact millions of low-income households who are going to be facing a really tight squeeze on their finances through winter,” CNBC correspondent Sam Meredith said.
Global demand was increased a year ago because of an especially cold winter in parts of Asia. Since then, inventories have remained low. Supply has not met demand. The United States exports more natural gas than in the past, but according to Nikos Tsafos at the Center for Strategic and International Studies, “We’re maxed out on exports, we can’t export more — no matter what the price is — in Europe. The international market is creating a draw on U.S. gas, but that draw would exist even if prices in Europe are half as high as they are right now.” Even though the natural gas inventory in the United States is below average levels, producers seem slow to increase production. And additional pipelines could increase the amount of gas in the market, but that kind of investment in infrastructure would be met with significant push back from those interested in transitioning to renewable energy.
Many analysts are suggesting these natural gas energy prices could remain high all season. The hope is for price increases to trend lower as panic buying lessens. Still, a colder than normal winter could provide dramatic increases to heating bills.