The price of natural gas has risen more than 200% so far this year and now sits at its highest
level in 14 years.
The U.S. natural gas benchmark Henry Hub price is currently trading at $8.75 U.S. per million
British thermal units, or MMBtu. Last week, the price surged to a 14-year high of more than $9
U.S. That’s up from less than $3 U.S. at this time last year.
So far in 2022, the price of crude oil has risen about 85% year-over-year, while natural gas
prices are up more than 200%. The last time natural gas prices surged this much was in 2008.
The war in Ukraine and resulting concerns about global energy security have driven up
commodity prices worldwide, with natural gas prices among the most elevated.
Also driving the growth in natural gas prices are surging liquefied natural gas (LNG) exports
from the U.S. Gulf Coast, aimed at helping to meet global demand for energy, along with low
North American storage levels.
The natural gas industry, which had gone through more than a decade of depressed prices prior
to the current commodities boom and laid off workers, is having a hard time keeping up with the
sudden surge in demand.
Natural gas prices are also heavily influenced by weather and demand for heating and air
conditioning. That means extreme heat this summer could push prices even higher in coming
months and move it above the $10 U.S. mark.
In a recent report, the U.S. Energy Information Administration said that “natural gas prices could
rise significantly above forecast levels if summer temperatures are hotter than assumed . . . and
electricity demand is higher.”
Earlier this month, the Canadian Association of Energy Contractors (CAOEC), which represents
contract drillers and well servicing companies, revised its 2022 drilling forecast from the 6,457
rigs it had projected in November of last year to 6,902.
