Natural Gas Price Forecast – Natural Gas Markets Plunge to Find Buyers

Natural gas markets have fallen a bit during the course of the trading session on Thursday to reach down towards the $5.40 level, which is an area that has been supportive in the past and now that we have turned around the way we have, I suspect that it is only a matter of time before we go higher. After all, part of the pullback was due to Vladimir Putin suggesting that Russia was going to continue pumping natural gas at a high rate to the European Union. However, natural gas markets are extraordinarily localized, so this will have minimal to no effect on the United States.

NATGAS Video 08.10.21

As for LNG exports, the United States does not do much of that because quite frankly it is not set up to be an exporter. Without going into the process, it makes much more sense for an energy company to sell natural gas in the United States or Canada, possibly even Mexico, then it does to go through the process of sending natural gas across the ocean. It is not that it cannot, it is just that the margins are not quite as attractive, despite the fact that the European equivalent is roughly $36 right now.

Given enough time, American natural gas may find its way to the European Union, but right now that energy crisis continues so therefore it does put a little bit of a bid in the market due to the fact that the United States had so much in the way of disruptions due to hurricane Ida and a tropical storm. Beyond that, we also had severe droughts earlier this year that dwindled supplies in an attempt to cool homes. At this point, I still think we probably grind higher.

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