Natural Gas Prices – Historical Graph
- The average price in the past 3 days is
- The average price in the past 7 days is
- The average price in the past 30 days is
- The average price in the past 365 days is
Popular questions about natural gas prices:
Natural Gas Prices Explained
Natural gas prices showed stronger trends as the market struggled with the global energy crisis. Also, new gas supplies remained limited due to the slow growth of LNG production. On the supply side, the geopolitical tensions in the Middle East and the traffic in the Panama Canal continue to fuel price volatility.
Another supply uncertainty in the coming years is the expiration of the Russian gas export transit (via Ukraine). This will end all the piped gas deliveries from Russia to Europe if agreements aren’t set before the date. Also, the growing import volumes from Africa and Asia offset the current natural gas inventory.
Why are natural gas prices fluctuating?
1. Crude Oil Prices
Crude oil market demand and value are the main drivers of natural gas. Thus, when the price of crude oil barrels increases, so does other costs of fuel products. Conversely, if demand decreases, other products’ demand and prices follow suit.
2. Economic Growth
Generally, a country’s purchasing power stems from its economic performance.
Strong economic growth particularly in the industrial, commercial, and transportation sectors will result in its high demand and price as it is an important element in the power generation for generating electricity.
3. Storage Costs
The cost of maintaining natural gas storage level facilities can spur their price in the international and local markets.
Furthermore, supply and demand also influence its price. Lower demand means longer time in the storage facility. Its storage maintenance fee will have a corresponding value in the natural gas overall price.
4. Weather
Severe weather conditions such as hurricanes and tropical storms greatly affect its production, supply, and prices.
For instance, lower natural gas demand and prices are common during the summer season. However, its prices rise sharply during winter months as this commodity is used to fuel heating systems.
5. Competition Among Other Resources
Both coal and natural gas power energy and industrial companies. Typically, these companies will try to control production costs by using the cheapest fuel source. Such decisions are based on product availability and prices.
For instance, if natural gas prices are higher than coal, then its demand will decrease as companies will leverage the cheaper coal and vice versa. Thus, natural gas prices thread on the availability of coal.
Which variables impact the price of natural gas?
- Crude Oil Prices
- Economic Growth
- Storage Costs
- Weather
- Competition Among Other Resources
- Taxes and Tariffs
- Geopolitical Events
Where does natural gas come from?
It’s a fossil fuel formed from plants, animals, and microorganisms that lived millions of years ago. Hydraulic fracturing, horizontal drilling, and acidizing are the processes to extract and remove impurities.
The Chinese were the first to use natural gas to boil water and create salt around 500 BCE. Additionally, the Romans used it for lighting and heating.
Furthermore, Britain established the first commercialized natural gas in 1785 when it brought to light British houses and streets. This inspired Baltimore, Maryland to light its streets with gas and the practice expanded around the U.S.
Types of natural gas according to its origin:
1. Biogas – This natural gas comes from decomposed organic matter such as animal waste, sewage, and industrial byproducts.
2. Deep Natural Gas – This gas sits 4,500 meters (15.000 feet) below Earth’s surface. This comes from the buried pre-historic animals and plants fossil fuels.
3. Shale – Shale gas comes from an underground shale rock which scientists considered impermeable compared to marble. Drilling shale takes a lot of effort, time, and resources.
4. Coalbed Methane – This gas comes as vapor from the seams of mined coal underground. Though considered a waste product, it is more popular than other natural gases.
Presently, most natural gas comes from its top producers which are the United States, Russia, Iran, Qatar, and Canada.
What is the future price of natural gas?
Seasonal demand largely affects the marketability of natural gas.
However, this new year might bring another one or two price movers as the heightened attack of passing merchant vessels in the Red Sea greatly influences Russia’s daily shipment to Western Europe. The region depends on the country’s natural gas. Thus, this is a potential market for U.S. natural gas.
Additionally, here are the present and future factors affecting natural gas prices in 2030:
Supply and demand – Natural gas prices are determined by the balance between supply and demand. On the supply side, the availability of shale gas resources and LNG imports will be key elements. On the demand side, economic growth, weather patterns, and the transition to clean energy will all play a role.
The transition to clean energy is likely to reduce demand for natural gas in some regions. However, natural gas is expected to play an important role in the global energy mix for many years to come.
Government policies aimed at reducing carbon emissions can lead to higher natural gas prices as it is a cleaner burning fossil fuel than coal and oil.
Overall, market analysts expected relatively stable natural gas prices in 2030 trading at $19.50 per thousand cubic feet.