Europe's Winter Gas Crisis Hits U.S. Supplies Hard
Natural gas prices in Europe are spiking as winter approaches, and this increase is having a ripple effect on the US market. The Dutch TTF has jumped over 5% to €83.75 per megawatt-hour, which is similar to late 2022 pricing levels. This surge is attributed to low storage levels in Europe, with only 68% of tanks filled as of September 12, compared to a five-year average of 84%. Experts predict that even reaching 75% capacity will be challenging.
The Strait of Hormuz remains closed, disrupting Middle East LNG exports to Europe. As a result, the US market is feeling the pressure, with LNG export flows hitting 19.9 Bcf per day on Monday, up 2.9% from the previous week. This increased demand is pulling molecules away from domestic storage, putting additional pressure on the US balance sheet.
The heat in the southern US has been above-average, extending into September and keeping air-conditioning demand high. The Commodity Weather Group reported this trend, which was also backed up by data from the Edison Electric Institute showing a 19.69% increase in lower-48 electricity output for the week ended September 5.