Prices of natural gas are at an all-time high in the present month, contradicting the macroeconomic data from big economies, mainly the U.S. giving rise to worries over global development. There are various factors in play that are raising the natural gas prices, including a heatwave that has broken temperature records in various parts of the world, giving rise to the need for gas for air conditioning, paired with the Norwegian Gas plant situation. Furthermore, a weak USD is also influencing the sudden change.
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As per the Natural Gas World (NGW), natural gas prices have been following an upward trajectory due to the need for powering air conditioning, considering the extremely hot weather in various countries.
Furthermore, the prices are soaring as a result of the Norwegian supply constraint, which was caused by a leak on May 31 at the Hammerfest LNG export terminal, which has been under maintenance. The Kollsnes plant had also been affected by the issue.
The European, as well as the global gas market, is managing supply and demand adequately. With a milder spring, Europe has managed to stock 73% of its supply. Japan and South Korea accounted for a way higher gas stock as well.
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According to the Procurement Resource article, the prices of natural gas have soared due to three main reasons. Primarily the strong heatwaves in some countries have given rise to the demand for air conditioning, which is powered by gas. Secondly, the Norwegian supply constraint was triggered due to a leak affecting supply, and lastly, the weakening of the dollar. However, compared to the situation before, the global supply situation seems manageable, with countries in Europe, Japan, and South Korea managing to stock supplies.
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