US natgas prices soar by 140% in the Arctic storm, increasing consumer costs
U.S. Natural Gas?Futures have jumped 140% in the last seven trading days. Cash gas and power prices also hit record highs this week, as an Arctic blast sent heating demands soaring, and frozen?oil?and?gas wells cut gas production to a 2-year low.
Power prices are expected to rise sharply, putting pressure on consumers already paying higher bills due to the demand for power, particularly from data centers. Retail electricity prices are on the rise, rising faster than inflation since 2022. The U.S. Energy Information Administration has predicted that retail residential power prices will increase by another 4% this year, to a new record high.
The price increase this week has hit industrial and electric power clients who usually purchase gas in bulk. These customers were forced to pay exorbitant gas prices to keep their plants running.
In a statement issued on Wednesday, the Industrial Energy Consumers of America (a lobby group representing U.S. manufacturers) said that the prices of electricity and natural gas are so high, many manufacturers are unable to produce their products at a profitable level.
PJM Interconnection, America's largest power grid, which covers 13 Midwest, Mid-Atlantic and Washington, D.C. states, predicted demand could reach a record winter before the weekend. Spot power prices in the PJM West Hub
New England spot gas prices at Algonquin hub
Power generators include the cost of gas in their electricity rates when they buy it at high prices. This is a 'big part' of the reason why power prices for next day in PJM, New England and other regions have soared to new highs.
The IECA urged on Wednesday the U.S. Department of Energy, in an effort to reduce 'energy costs and to ensure reliability, to suspend spot liquefied gas exports.
Tyson Slocum is the director of Public Citizen's Energy Program. He said that reducing record LNG exports could help?deflate domestic gas prices. FERC should also use its statutory authority to impose more transparency on gas spot prices. According to data provided by financial firm LSEG on Monday, U.S. LNG firms did'reduce the amount gas flowing to their plant to a 1-year low, but not necessarily as a result of any government directive. Some energy companies took the unusual move of importing LNG to the U.S. to meet soaring demands for the fuel, and to capture some of the high prices this week. (Reporting and editing by Nia William; Scott DiSavino)
(source: Reuters)