$10 Gas? Don’t Be Alarmed. It’s the Other Kind
Even though natural gas prices are elevated, weather and additional supply seem likely to push them back down.
A few extra rigs could make a lot of difference.
Photographer: Ty Wright/Bloomberg
The phrase “$10 gas” is liable to put Americans in the hospital. This is a linguistic hazard, however: The latest energy shock doesn’t concern gasoline prices — which have been falling — but rather natural gas. After long years where natural gas crawled along at $2 per million BTU or thereabouts, it is suddenly back in double figures, briefly nosing above $10 Tuesday morning for the first time since 2008.
Gas is in demand globally because of Russia’s disruption of supply to Europe as part of its war against Ukraine. US export capacity is effectively maxed out, apart from the Freeport liquefied natural gas facility being repaired after an explosion in June. In effect, therefore, the intrigues of Russian supply aren’t really moving US gas prices; high exports are factored in already and, barring Freeport’s expected restart in the fall, they can’t go much higher for now.