• Email Us: [email protected]
  • Contact Us: +1 718 874 1545
  • Skip to main content
  • Skip to primary sidebar

Medical Market Report

  • Home
  • All Reports
  • About Us
  • Contact Us

U.S. natgas volatility jumps to a record as prices soar worldwide

October 7, 2021 by David Barret Leave a Comment

October 7, 2021

By Scott DiSavino

(Reuters) – Volatility in U.S. natural gas futures jumped to a record on Tuesday on the back of an energy crunch in major world markets that has sent prices soaring globally.

Natural gas prices are at record levels in Europe and Asia, as major markets like China struggle to find enough fuel to meet demand that has bounced back from the coronavirus-induced downturn faster than anticipated.

In Europe, prices this year have rocketed more than 500%, on worries that current low levels of storage will be insufficient for the winter.

That has fed through to U.S. natural gas futures, which recently closed at 12-year-highs of $6.31 per million British thermal units (mmBtu).

While that is still a far cry from prices in Europe and Asia where natural gas is over five times more expensive, the market has grown increasingly volatile as competition for limited U.S. liquefied natural gas (LNG) exports increases.

In the United States, implied volatility – a measure of expected fluctuations in the market – surged to an all-time high of 122.5% on Tuesday, topping the prior record of 117.5% reached in November 2018.

Part of the reason for the wild moves is merchant commodity firms, hedge funds and other major investors in the market finding themselves exposed to unexpected price rallies. Companies that bet the wrong direction on markets are sometimes forced to shift positions quickly to cover their losses, further adding to the volatility.

There have been no recent reports of hedge funds failing, but Statar, which invests in gas, reportedly lost about $130 million. By contrast, commodities giant Andurand has posted big returns due to rising prices.

(Graphic: Natural gas volatility surges to a record, https://ift.tt/3oJTYGK)

Competition between Europe and Asia for limited LNG cargoes and other energy supplies has led to manufacturers curtailing activity in Europe and sparked power crises in China. Global gas prices have spiked to record highs of around $40 per mmBtu in Europe and $35 in Asia.

The last time volatility spiked so aggressively in November 2018, volume in gas traded on the New York Mercantile Exchange (NYMEX) soared to a record 1.6 million contracts.

On Tuesday, volume on the NYMEX held around 500,000 contracts, a little higher than over the past 30 days but only the most in a day since last week.

However, volumes in the U.S. Natural Gas Fund, an exchange-traded fund designed to track gas prices, soared over 30.2 million shares on Sept. 28, its biggest daily volume since hitting a record 43.1 million shares in November 2018.

Analysts do not expect U.S. prices to reach the lofty levels in Europe or Asia because the United States should have enough gas in storage for the winter heating season and because U.S. LNG export plants were already producing all of the super-cooled gas they can.

The United States only has the capacity to turn about 10.5 billion cubic feet per day (bcfd) of gas into LNG, or about 13% of what the nation consumes domestically.

Global markets will have to wait until later this year to get more from the United States when the sixth liquefaction train at Cheniere Energy Inc’s Sabine Pass and Venture Global LNG’s Calcasieu Pass in Louisiana are expected to start producing LNG in test mode.

(Reporting by Scott DiSavino; Editing by Kirsten Donovan)

Source Link U.S. natgas volatility jumps to a record as prices soar worldwide

David Barret
David Barret

Related posts:

  1. Mexico’s top court decriminalizes abortion in ‘watershed moment’
  2. El Salvador’s world-first adoption of bitcoin endures bumpy first day
  3. SoftBank leads $680 million funding round in NFT fantasy soccer game Sorare
  4. Evergrande woes hit Japan’s toilet, air-conditioner and paint manufacturers

Filed Under: News

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • The World’s Largest Carnivoran Is A 3,600-Kilogram Giant That Weighs More Than Your Car
  • Devastating “Rogue Waves” Finally Have An Explanation
  • Meet The “Masked Seducer”, A Unique Bat With A Never-Before-Seen Courtship Display
  • Alaska’s Salmon River Is Turning Orange – And It’s A Stark Warning
  • Meet The Heaviest Jelly In The Seas, Weighing Over Twice As Much As A Grand Piano
  • For The First Time, We’ve Found Evidence Climate Change Is Attracting Invasive Species To Canadian Arctic
  • What Are Microfiber Cloths, And How Do They Clean So Well?
  • Stowaway Rat That Hopped On A Flight From Miami Was A “Wake-Up Call” For Global Health
  • Andromeda, Solar Storms, And A 1 Billion Pixel Image Crowned Best Astrophotos Of The Year
  • New Island Emerges In Alaska As Glacier Rapidly Retreats, NASA Satellite Imagery Shows
  • With A New Drug Cocktail, Scientists May Have Finally Found Flu’s Universal Weak Spot
  • Battered Skull Confirms Roman Amphitheaters Were Beastly For Bears
  • Mine Spiders Bigger Than A Burger Patty Lurk Deep In Abandoned Caves
  • Blackout Zones: The Places On Earth Where Magnetic Compasses Don’t Work
  • What Is Actually Happening When You Get Blackout Drunk? An Ethically Dubious Experiment Found Out
  • Koalas Get A Shot At Survival As World-First Chlamydia Vaccine Gets Approval
  • We Could See A Black Hole Explode Within 10 Years – Unlocking The Secrets Of The Universe
  • Denisovan DNA May Make Some People Resistant To Malaria
  • Beware The Kellas Cat? This “Cryptid” Turned Out To Be Real, But It Wasn’t What People Thought
  • “They Simply Have A Taste For The Hedonists Among Us”: Festival Mosquito Study Has Some Bad News
  • Business
  • Health
  • News
  • Science
  • Technology
  • +1 718 874 1545
  • +91 78878 22626
  • [email protected]
Office Address
Prudour Pvt. Ltd. 420 Lexington Avenue Suite 300 New York City, NY 10170.

Powered by Prudour Network

Copyrights © 2025 · Medical Market Report. All Rights Reserved.

Go to mobile version