Natural Gas Prices Rise 96% Over One Year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The price of natural gas, used as fuel for power generation in the United States, has doubled over the past year.

According to the Wall Street Journal (WSJ) on the 20th (local time), natural gas futures prices in the U.S. market closed at $3,215 per million BTU (British Thermal Units) on the 18th. This marks a 96% increase compared to a year ago, reaching the highest price level since 2017.

The Dutch natural gas futures price, which serves as a benchmark for natural gas prices in Western Europe, has also more than doubled over the past year.

Natural gas prices are rising amid concerns that supply will not keep up with increasing demand, driven by the global economic recovery and expectations of a hot summer climate.

In contrast, U.S. natural gas production peaked in December 2019 and has been declining for 11 consecutive months through March this year due to sluggish investment amid concerns of oversupply.

The WSJ reported, "As natural gas prices rise, the price of coal used for power generation, a competing fuel, has also increased significantly compared to a year ago," adding, "Natural gas prices may rise further ahead of the winter season when demand for heating increases."