By Cristian Bustos. Originally published at ValueWalk.
Natural gas prices in the U.S. have hit a record since 2008 on Monday as Russia’s invasion of Ukraine rages on and sends shockwaves within the energy market. The forecast of cooler spring temperatures adds up to the problem.
Natural Gas Prices
As reported by CNBC, the price of natural gas has hit a 13-year record, up 102% amid growing inflation and concerns over an economic recession.
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The media outlet reports that “Futures jumped 10% to trade as high as $8.05 per million British thermal units, the highest since September 2008. The jump builds on recent strength, with natural gas coming off five straight positive weeks.”
EBW Analytics said, “With momentum firmly bullish and the market ill-equipped to handle any further bullish shocks, notable continued gains for natural gas remain likely this summer.”
The firm asserts that a “bullish weather shift” has out the American market into “overdrive.”
Record Prices
In Europe, the phenomenon is less severe, despite natural gas futures soaring to record data while the economic bloc is looking elsewhere to cut its energy dependence on Russia. Henry Hub prices have increased as the continent receives record levels of liquified gas from the U.S.
RBC noted, “LNG exports have taken on more significance with geopolitics and demand from both power generation/ industrial usage are strong. The US role as an exporter continues to increase.”
“There is a fundamentally constructive backdrop driven by record LNG outflows, strong Mexico exports, and producer discipline.”
The rally, however, is not expected to last long, as ″[A] combination of factors could raise demand and slow production growth, but the market might be over-estimating their impacts as prices have surged,” RBC added.
Investors are following shares of the likes of EQT Corporation (NYSE:EQT) and Coterra Energy Inc (NYSE:CTRA) as they have reached a 52-week high.
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