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Natural Gas Prices See Record High

In 2022, we have seen no shortage of volatility in the natural gas market. Volatility in the market shows a weak outlook for future prices, as demand far outpaces production. In fact, prices in Europe are almost ten times higher than last year (2).

Recent Updates in the Market

 

Between the aftermath of COVID, the Russia-Ukraine war, and global supply chain issues, prices have been high all year long. Prior to the start of the war, Russia was a global leader in natural gas exports, but have since decreased. Thus, Russia’s decreased production has made the US the world’s largest exporter of LNG in the first half of 2022 (3). The US has been exporting more to European allies, which contributes to higher prices because of an increased demand.

Quite recently, natural gas futures hit $10 for the first time since the economic crisis of 2008. In addition, volatility, or the measure by which prices increase daily, reached a 20-year high back in February (4). Supply chain issues and limited inventories are also not helping the problem (1). Thus, prices around the globe have surged.

The Future

While no one can say for certain what will happen in the market, we do not anticipate prices decreasing anytime soon. The war, pandemic aftermath, and supply chain issues are all wreaking havoc on the economy, but we also have to remember the winter months are approaching quickly. People will be needing more natural gas to heat their home and stay warm, which will likely increase prices due to even higher demand. We cannot rely on central banks to provide relief, as they may be forced to keep hiking interest rates to combat inflation during these trying times.

What's the Solution?

Going solar is an environmentally-friendly solution to avoid the risks of increasing prices. Solar helps you save money on costly bills, receive financial incentives and tax credits from the government, and adds value onto your home. Get in touch with us today to learn more about options for you!