Oil price headline: Record U.S. LNG Exports To Europe May Not Last
By Irina Slav - Sep 11, 2022, 2:00 PM CDT
U.S. LNG exports to Europe increased substantially since the beginning of the year.
The EU’s gas storage refill bill amounts to 10 times its usual.
LNG exports have already resulted in substantially increased inflation via higher natural gas and electric power prices.
The United States and its natural gas have been vital for Europe’s attempt to fill its gas storage ahead of this winter season. Yet record U.S. LNG exports have led to a surge in domestic gas prices. The boomerang is coming back. When President Joe Biden promised the European Union there would be enough natural gas for its winter, EU politicians rejoiced and doubled down on Russian sanctions. A few months later, EU gas storage is full ahead of schedule.
Meanwhile, however, LNG prices have soared like an eagle, China is re-selling Russian LNG to Europe, and gas prices in the U.S. are three times higher now than they were a decade ago and up 95 percent on the futures market for November 2022 to March 2023. And most analysts in Europe are talking about a recession.
That U.S. LNG was not going to be enough was clear from the beginning. As energy analyst David Blackmon, for example, has repeatedly warned since March, there is plenty of natural gas in the ground in the U.S., but far from all of it is being extracted. There are, in other words, purely physical constraints to U.S. gas exports to Europe.
$NATGAS daily chart (this would be a good place to rally . . . will it? Watchlist for sure.)
$NATGAS weekly chart (but the weekly chart still shows weakness)
$NATGAS monthly chart (that’s an almost 3-year old UP channel)