Concerns Over Midwestern US Cold Wave Amid Rising Ukraine Tensions
US Government Discusses Gas Supply Issues with South Korea, China, Japan, India, and Europe
[Asia Economy Reporter Hyunwoo Lee] U.S. natural gas prices surged by double digits amid growing concerns over a cold wave in the Midwest, surpassing the $5 mark again after about two months. Natural gas prices, already under upward pressure due to the Ukraine crisis, are feared to continue rising for some time.
According to CNBC on the 2nd (local time), the Henry Hub gas price, a key indicator of natural gas in North America, jumped 15.78% from the previous session to $5.50 per MMbtu (one million British thermal units). This is the first time the price has exceeded $5 since November 26 of last year, about two months ago. Compared to $3.81 at the beginning of the year, it has risen more than 44.3%.
The surge in U.S. natural gas prices on this day was driven by a cold wave sweeping through the U.S. Midwest. According to the Associated Press, a winter storm accompanied by heavy snow hit the northern Texas, Colorado, Oklahoma, Illinois, and Michigan areas in the U.S. Midwest, resulting in the cancellation of about 2,100 flights and paralyzing transportation in the region.
Following this news, concerns arose that Texas, a major U.S. natural gas production hub, could face power grid and gas supply disruptions again due to the cold wave crisis, as it did last year, causing natural gas prices in the U.S. to surge. On the 1st, Texas Governor Greg Abbott said at a press conference, "We are better prepared for the cold wave crisis this year than last year," but added, "However, there is a risk that power poles or trees could fall due to the cold wave and damage major power lines."
Natural gas prices, already under upward pressure due to increased military tensions over Ukraine, are feared to rise further. On the same day, Bloomberg News reported, citing U.S. government sources, that the U.S. government discussed European gas supply issues with major Asian U.S. natural gas importers such as South Korea, China, Japan, and India in preparation for the outbreak of the Ukraine crisis.
Bloomberg News stated, "The U.S. government contacted major Asian natural gas importers to discuss sending gas to Europe," and added, "The U.S. government is also in talks with major natural gas producers such as Qatar, Nigeria, Egypt, and Libya to see if production can be increased in emergencies, but these countries say it is difficult to significantly increase short-term production."
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