Natural gas prices in the US hit a record: what's the reason
Kyiv • UNN
US natural gas futures hit their highest level in two years due to harsh winter conditions. The freezing of gas wells and record LNG exports led to a 29% increase in prices over the week.
Natural gas futures in the United States have reached their highest level in more than two years due to harsh winter conditions that have increased demand and limited supplies. This is reported by Trading Economics, according to UNN.
Due to the freezing of gas wells in key production regions, production declined, and record export volumes of liquefied natural gas (LNG) further complicated the market situation
This surge is part of a prolonged rise that has pushed gas prices to technically oversold levels and caused a sharp rise in the value of shares of major gas companies.
Gas futures for March delivery on the New York Mercantile Exchange rose 6.8% on Wednesday to close at $4,280 per million British thermal units (MMBtu), their highest close since December 2022. This is the seventh consecutive day of gains, something not seen since July 2021. The rise, which has pushed gas prices up 29% in just one week, comes as temperatures drop, increasing heating demand while limiting production due to freezing conditions in key supply regions.
The ratio of oil price to gas price has fallen sharply due to this surge in gas prices and the decline in oil prices, dropping to 17 to 1, the lowest level since December 2022. Historically, the oil price in 2025 averaged 20 times the gas price, compared to 33 times in 2024 and a five-year average of 21 times between 2019 and 2023. These changes reflect a shift in energy market dynamics, making natural gas a more competitive alternative to oil in terms of price.
On the supply side, production rebounded slightly in early February, with gas production in the lower 48 states averaging 105.0 billion cubic feet per day (Bcf/d), up from 102.7 Bcf/d in January. However, due to the Arctic cold that has gripped key production regions, daily production has dropped by 6.7 Bcf/d over the past two weeks, reaching a four-week low of 100.1 Bcf/d. This sharp drop highlights the vulnerability of gas production to extreme weather conditions as freezing temperatures continue to affect well operations and pipeline flows.
Despite these supply constraints, LNG exports reached record levels, further exacerbating the situation on the domestic market. Gas flows to liquefied natural gas plants averaged 15.4 Bcf/d in February, up from 14.6 Bcf/d in January, surpassing the previous monthly record of 14.7 Bcf/d set in December 2023. Gas exports reached an all-time high of 16.2 Bcf/d on Tuesday, surpassing the previous record of 16.0 Bcf/d set just one day earlier. The rapid expansion of LNG capacity in the US is playing a key role in supporting demand, with Venture Global's Plaquemines LNG plant in Louisiana ramping up production to a new high of 1.6 Bcf/d.
Weather forecasts indicate that cold temperatures will prevail in most US states through February 22, keeping heating demand high before temperatures return to seasonal norms in late February and early March. As temperatures drop, gas demand, including exports, is expected to decline from 146.8 Bcf/d this week to 129.2 Bcf/d next week.
Meanwhile, unplanned outages at key LNG facilities have added to market uncertainty. Cameron LNG's export plant in Louisiana is experiencing a significant decline in gas flows for processing, falling to a two-month low of 1.6 Bcf/d on Wednesday, down from 2.4 Bcf/d the previous day. Although a strong storm has passed through Louisiana, the possible consequences for the plant are still unclear.
Recall
During a meeting with Japanese Prime Minister Shigeru Ishiba this month , Trump discussed the possibility of Tokyo's involvement in a project to produce and export liquefied natural gas (LNG) from Alaska. https://unn.ua/amp/ssha-ta-yaponiia-obhovoriuiut-hazovyi-proiekt-na-aliastsi-za-dollar44-mlrd
