Former Trump Energy Secretary Dan Brevillet explains how America can create more global demand for natural gas and oil.
Natural gas prices rose more than 20 percent on Monday after a flurry of predictions over the weekend. Arctic incoming air It could set the US up for the coldest January in a decade or more.
Although prices eased somewhat the next day, the market's major swings this winter may not be over.
Natural gas prices rose this week after forecasts that the US and Europe will face tougher-than-expected winters. (Silas Stein Alliance/Image via Getty Images/Getty Images)
Phil Flynn, energy market analyst and FOX Business The colleague says that America has abundant reserves of natural gas, which is a good thing. The problem, he says, is that the U.S. has also been complacent on the demand side when it comes to cold weather, because the country hasn't really seen the kind of severe winter that is predicted over a long period of time.
He explained that the forecast extended period of extreme cold would not only increase demand and deplete storage — possibly at the fastest rate we've ever seen — but also risk disrupting production.
Energy prices are high and people in these states face the heaviest electricity bills
“When you get a cold event like this, not only are you going to see unprecedented demand, but you're going to have the potential for infrastructure to freeze,” Flynn said in an interview. “They have to close the wells because it's too dangerous to produce.”
Snow-covered transmission lines leading to storage tanks at a liquefied natural gas (LNG) terminal. (Reuters/Gary Cameron/Reuters Photo)
It's not just the United States that could be affected. Some forecasters say Europe can also expect a colder winter due to the polar vortex, and the region is already seeing high natural gas prices as storage depletes faster than usual.
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At the same time, the Russian gas giant, Gazprom, is considered Stop all piped gas deliveries At the end of its five-year contract, it will be shipped to other European countries through Ukrainian pipelines.
Flynn said this is another reason Biden is “ridiculous” on liquefied natural gas (LNG) export permits.
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Markets react to all these factors. So what does this mean for the consumer?
Flynn says when the price of natural gas Like this week, it usually takes a few months for these increases to reach consumers, depending on the part of the country they live in and how their local utilities operate.
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Regardless of when the temperature drops, Americans in cold-affected areas can expect to see their prices rise almost immediately due to usage alone, as they tend to turn up their thermostats and their heaters. They work around the clock.
“Consumers are feeling it, mainly because they're using more and prices are going up,” Flynn told FOX Business. “It's a double whammy.”