The price of American natural gas fell on Wednesday to its lowest level since July 2020. The futures contract for delivery in March fell to $1.86 per million BTU, the Anglo-Saxon benchmark on this market.
Gas prices in the United States are depressed by abundant supply, large stocks, and the approach of spring.
American production has accelerated since the fall and has not slowed down since.
The winter was
“incredibly mild and the market is starting to transition
” into spring, a period when demand is low, says Eli Rubin, an expert at energy consulting group EBW Analytics.
Natural gas stocks are 5% higher than their average level over the last five years at the same time, the US Energy Information Administration (EIA) also indicated.
The sector faces other difficulties in terms of outlets.
Activity at the Freeport liquefied natural gas (LNG) export terminal has been hampered by technical problems.
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And 2023 did not see the opening of a new export terminal, a first since the United States switched to LNG on a large scale in 2016. The major project expected in 2024, ExxonMobil's Golden Pass and QatarEnergy in Texas was pushed back to the first half of 2025.
“With this delay, we have additional supply, but the demand is not there,”
explains Eli Rubin.
The new terminal should, in fact, make it possible to transport LNG to other countries.
While waiting for these facilities to open, gas is redirected to the American market, where there is not enough demand to absorb it, driving prices down.