Natural-gas prices are roughly twice as high as they were a year ago as the summer air-conditioning season begins. As the world’s economies recover and Americans lower their thermostats for what is forecast to be a sweltering summer, demand for the fuel is increasing. Meanwhile, producers in the United States have committed to the limited drilling plans they drew up when prices were lower, removing the oversupply keeping them down.
Natural-gas futures closed at $3.215 per million British thermal units on Friday, up 96 percent from a year ago and the highest price for the summer season since 2017. When triple-digit temperatures burned the Southwest earlier this month, futures traded even higher—and regional spot prices rose. Analysts predict that prices will be significantly higher when it comes time to turn on the furnaces later this year.
Gas prices are high throughout the world, not just in the United States. Dutch gas futures, a barometer for Western Europe’s fees, have more than quadrupled to multiyear highs in the last year, including a steep surge since February. Imported liquefied Natural-gas is fetching more than five times its June price in Asia, luring vessels carrying chilled shale gas over the Pacific.
More expensive gas has fueled demand for coal in overseas markets, where gas competes for power plant fuel. Thermal coal futures prices have more than doubled from a year ago at a port in Newcastle, Australia. The benchmark price has risen by 27% in the last month and is at its highest level in over a decade. Americans can expect higher utility bills if rising prices continue. The work-at-home crowd may be squeezed.