Henry Hub Disconnect: Global Prices Leave US Natural Gas Behind
Natural gas prices at the Henry Hub remain disconnected from global prices due to a supply glut in the US.
On Thursday, natural gas traded at $2.957 per MMBtu, up 3.2 cents or 1.09%, ahead of the NYMEX open and the weekly storage report.
The European benchmark, TTF, settled at €61.95 per megawatt-hour on Thursday, down 0.96% on the day but up 50.19% over the past month and 91.44% over twelve months, converted to around $20.70 per MMBtu.
Asian spot LNG has been trading near $26 per MMBtu, roughly 143% above pre-war levels, with analysts targeting $30 or higher through the summer and $40 if the Strait of Hormuz remains shut for six months.
The dislocation in prices is due to structural rather than sentimental reasons, including record-low-48 dry gas production, storage sitting above the five-year average, and liquefaction and export capacity running flat out at roughly 17 to 18 billion cubic feet per day.
Unless this bottleneck clears, Henry Hub will continue to trade on Texas weather and weekly injection numbers while the rest of the world fights over cargoes.