Will natgas prices continue to fall?

In March 2020, the price of oil became negative due to temporary factors. This was a great buying opportunity. (I bought XOM at the time.)

I have been puzzled by the recently falling price of natgas. Is this another temporary drop?

The longer-term charts show that the price of natgas rose from $1.63 per MBTU in June 2020 to $6.17 today. In 2022, the price has been highly volatile, fluctuation between $5 and $10 in a matter of months. Right now it’s in a falling trend which might quickly reverse.

Why Natural Gas Prices in Europe Are Suddenly Plunging

A combination of full storage, lower demand and mild weather, among other factors, has eased concerns of a spike in heating and power prices — for now.
Stanley Reed

By Stanley Reed, The New York Times, Oct. 25, 2022

One of the main reasons for the plunge in prices is that Europe, at least for now, has all the natural gas it needs. That is because over the summer, Europe went on a global buying spree as Russia, its longtime main supplier, reduced its flow of natural gas.

Across the continent, governments and businesses have aggressively replenished how much gas they are holding in storage. At the urging of European Union officials and at a high cost, energy companies and governments have filled underground caverns and other facilities to more than 90 percent of capacity, compared with less than 80 percent year ago…But analysts warn that the recent drop in gas prices could be fleeting — natural gas that is set to be delivered to Europe this winter is already being sold in futures markets at a considerable markup to the current price…

Gas prices in Europe remain historically elevated, even after the recent decline, trading at twice the level set at this time a year ago and even higher versus long-term averages.

As a result, many energy-hungry businesses like aluminum smelters, steel mills and fertilizer plants have at least temporarily shut down…[end quote]

The fall in natgas prices is temporary. The price will probably rise soon. The manufacturers that have shut down won’t be able to re-start until the Macroeconomic situation has improved – end of the war in Ukraine, shipments of natgas from Russia restarted, economies recovering manufacturing and the need for raw materials.

That is a recipe for recession in Europe.

The fall in the natgas price is a blip.


In the good old days, we used $4/thousand cu ft or million btus as typical NG prices.

Prices below $2 to me indicate abundance from fracking. And sometimes the need to attract investors to build pipelines for orphan gas. Ie Shell building ethylene cracker in Pittsburgh in the middle of Marcellus Shale fields.

$7 to me suggests much US LNG going to Europe. Yes, mild winter and recession are factors. And the future of Russian gas. Will it come to market somehow?

I agree prices are volatile. A risky investment.



I am not sure about that. We get our news that is different than the EU’s.

The invisible elephant in the room is Iran…plus Iraq both NG suppliers. Particularly Iran. Topics around nuclear negotiations are sensitive right now. The WH and EU need policies for the EU to operate while economically combatting Russia.

Iran will continue to supply the EU this winter. I do not know if there are pipelines from Iran through Turkey.

Google results

Where does Iran export natural gas to?

Iran has the second-biggest gas reserves in the world and already exports some via pipeline to neighbors Turkey and Iraq.Mar 15, 2022

Putin has an opinion on this…