Natural Gas Prices Can Still Double From Here

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Natural Gas Prices Can Still Double From Here

Oops!Something went wrong.Please try again later.Editor OilPrice.comSeptember 13, 2021, 2:00 PM·4 min readIn this article: Oops!Something went wrong.Please try again later.

Natural gas prices have hit their highest levels since 2014, outpacing oil and many other commodities. On Monday, natural gas futures were trading up 2.6% to $5.09 per million British thermal units (BTUs), their highest settlement price since February 2014. Natural gas prices are up 117.6% in the year-to-date, while the biggest nat. gas benchmark, the United States Natural Gas ETF, LP (NYSEARCA:UNG) is up 88.6% over the timeframe.

The sticker shock is even greater in other key natural gas markets around the globe, with East Asian benchmark futures and European natural gas spot prices have climbed 4-5 times year-ago levels to $18 per MMBtu.

Yet, some experts are now saying that this rally is far from over.

Stan Brownell, an analyst at Argus Media, and Luke Jackson, an analyst at S&P Global Platts, figure that Henry Hub prices would have to jump to $10 or more to provide an incentive to fulfill domestic natural gas demand.

That would mean a doubling of natural gas prices from current levels to levels last seen in 2008 when the U.S. produced about 40% less natural gas