Henry Hub breaks above 4 $/mmbtu
We have written a lot recently about the drivers of high gas and power prices in Europe and Asia this year. This has continued this week, with JKM breaching 15 $/mmbtu for the first time since January and TTF now above 40 EUR/MWh (~13.7 $/mmbtu).
The USA has not been untouched however. While European prices are more than triple Henry Hub levels, it is still notable that spot prices have tipped above 4 $/mmbtu, based on several drivers:
- Above average temperatures forecast until September
- Storage levels below the 5yr normal
- Strong exports, with LNG terminals running flat out while Mexican exports are also on the rise
- Production remaining below pre-pandemic levels as the impact on rig count is still felt.
These factors combined act to raise the floor of global gas prices, even while the memory of US LNG shut ins seems now long ago.