Natural gas: Current market conditions
Since last spring, energy markets have been heavily affected by the conflict in Ukraine and its impact on the economic equilibrium in Europe, through a significant increase in the price of energy, including natural gas.
With maximum liquefaction and export capabilities already reached, the North American natural gas market responded to these shocks with some moderation. These international pressures were followed by cold temperatures and a sharp drop in natural gas stocks. Against that backdrop, North American natural gas prices rose to high levels as early as February, with markets anticipating they would remain high for several months.
Actual summer data shows that natural gas prices have indeed stayed at record highs, but for slightly different reasons than the market expected.
Firstly, unusually warm temperatures kept natural gas prices at such high levels. Throughout the summer, average temperatures in most parts of the United States, including Texas, remained above normal and drove power demand for air conditioning.