Gas is being snapped up around the world by a tenfold increase in Europe in 14 months

Natural gas, once cheap, has recently become a commodity price king, with the price of American natural-gas futures contracts rising to $4.20 per million British thermal units on August 18th, double last year's level. Asia has surged sixfold in the past year Europe tenfold in 14 months. In many countries, consumers businesses are feeling the pinch of soaring gas prices.

Asia up sixfold, Europe up tenfold

Natural gas has recently become a big commodity this year. LNG prices in Asia have jumped nearly 600 per cent in the past year, according to market data; European gas prices have risen even more dramatically, by more than 1,000 per cent in July compared with May last year. Even the gas-rich US is struggling, with prices hitting their highest levels in nearly a decade.

Rising gas prices are also fuelling inflation fears around the world.

CNBC: Rising natural gas prices, the specter of inflation, have become an economic political headwind for the Biden administration.

The gas industry is now a seller's market, major gas exporters such as Russia Qatar are in hot demand. Among the worst affected are European buyers, after it emerged that Russian gas exports to Europe have fallen by 1 billion cubic meters since July compared with June because of reluctance to pay high transit fees to Ukraine.

The hottest summer on record blew up gas prices

In many people's impression, natural gas demand peak season in the winter, why this year's natural gas market will have a slow season weak situation? What is the reason behind the surge?

More than a dozen people lined up in front of an electronics store in Seattle early in the morning to buy air conditioners.

The World Meteorological Organization says 2015 so far has been the hottest six years on record. Seattle's hot summer weather is running out of refrigeration equipment, along with natural gas. Because natural gas is abundant cheap in the United States, Europe the United States have a tradition of using natural gas as a fuel for electricity. But as a heat wave in the Northern Hemisphere significantly increased cooling loads, gas demand surged prices rose.

Moreover, as the global economy recovers, the gas supply gap is widening. Natural gas inventories in Asia, Europe the United States began to fall, prices rose again again, becoming "second iron ore."

"I think it's a good idea," said Forbes senior editor Christopher McGuire. Herman: If we can't get enough natural gas here in the United States, we're going to have to get it elsewhere.

According to foreign media, European gas stocks are now 25 percent below the five-year average.

David Jones, chief market strategist at a European investment trading platform: Gas stocks in Europe have fallen to their lowest level in more than a decade, so that could boost prices.

Dutch benchmark gas futures have surged more than 50 per cent this year in a scramble to trade near their highest level in 13 years. UK gas prices are at a 16-year high.

Yet Russia, the most important gas exporter to The European market, has cut supplies at a crucial moment. In recent half a month, Germany's Marno compressor station as an important hub to receive Russian natural gas to Europe, its received gas flow Russia reduced by nearly 50% compared with the previous, more leading to the spread of "gas shortage" in Europe.

Wang Zhen, director of cnooc Energy Economics Research Institute, said: Natural gas supply itself has decreased compared to last year the previous two years. It is actually due to the growth of demand itself. When demand increases a lot, supply can't keep up, of course there will be a contradiction between supply demand.

In recent years, the world's major economies have announced to accelerate the green energy transition, natural gas, as a cleaner energy than coal oil, has become a priority resource for the transition.

The International Energy Agency (IEA) released a report on relatively new energy, showing that global demand for natural gas is likely to continue to grow over the next few years, reaching 4.3 trillion cubic meters by 2024. The energy transition has been another driver of rising gas demand.

A gas pipeline sparks a fight between America Europe

Russian President Vladimir Putin German Chancellor Angela Merkel held their first face-to-face talks since the COVID-19 pandemic on Wednesday (local time), gas was one of the topics on the agenda. With the gradual upgrading of energy transformation, the strategic position of natural gas resources is gradually rising, the battle for natural gas resources has become increasingly fierce in recent years.

Nord Stream 2, a natural gas pipeline Russia to Germany under the Baltic Sea, would double Russia's gas exports to Germany. Nord Stream 2 has been in the international spotlight since its inception because it was designed to avoid Ukraine.

According to the plan of Germany's energy sector, in the fourth quarter of 2022, Germany will shut down all operating nuclear power units abandon nuclear power, natural gas will become one of the most important energy alternatives. But the United States, which is also rich in natural gas, does want Russia to compete with it for European markets to use energy against Ukraine other central Eastern European countries, so it has used sanctions legislation to block Nord Stream 2.

Also unhappy with Nord Stream 2 is Ukraine, which has been deliberately bypassed. The operation of Nord Stream 2 means that it will cut off nord Stream 1's "way of making money" in Ukraine.

Lin Boqiang, director of the China Institute of Energy Policy at Xiamen University: Without going through Ukraine, there would be nothing for Ukraine. The US is actually trying to send shale gas to Europe, but IT is certainly much more expensive than Nord Stream 2.

Nord Stream 2 is due to be completed in a few weeks should be operational by the end of the year, despite many obstacles. In 2021, 5.6 billion cubic meters of gas will be transported through nord Stream 2.

Lin Boqiang, director of the China Institute for Energy Policy at Xiamen University: Next we go to Central Asia, then we go to Russia. We have actually built four major corridors. This is an important manifestation of China's diversification of natural gas imports. We do want to rely too much on one region one country to ensure China's gas security.

For more information about energy trading platform, welcome to consult the financial service platform, storage logistics platform, hazardous chemicals business license processing platform bulk energy trading platform manufacturer Eurasia International Energy Trading Market Management (Jiangsu) Co., LTD.

Source: International gas network