Former Trump Energy Secretary Dan Brouillette explains how America can create more global demand for natural gas and oil.
Natural gas prices rose more than 20% on Monday after a flurry of forecasts over the weekend. incoming arctic air The United States could experience its coldest January in more than a decade.
Prices fell some the following day, but the market's huge rally this winter may not be over yet.
Natural gas prices soared this week on predictions that the United States and Europe could face a harsher winter than previously expected. (Silas Stein/Photo Alliance via Getty Images/Getty Images)
Energy market analyst Phil Flynn said: FOX business Contributors say America has abundant natural gas reserves, and that's a good thing. The problem, he said, is that the U.S. is complacent on the demand side when it comes to cold weather. That's because the country hasn't actually experienced the harsh winter expected for a long time.
He explained that the forecast for a long period of severe cold weather risks increasing demand and disrupting production as well as depleting stocks at perhaps the fastest rate ever seen. .
Energy prices are high and people in these states face the highest electricity bills
“When we get cold weather like this, not only do we see record demand, but we also have the potential to freeze infrastructure,” Flynn said in an interview. “The well has to be shut down because it’s too dangerous to produce.”
Transfer lines leading to storage tanks at a liquefied natural gas (LNG) terminal are covered in snow. (Reuters/Gary Cameron/Reuters Photo)
The United States is not the only country affected. Some forecasters say a cold winter is also expected in Europe due to the polar vortex, and natural gas prices are already soaring in the region as storage is depleted faster than usual. It says that there are.
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At the same time, Russian gas giant Gazprom Stop gas delivery by all pipes After the expiration of the five-year contract, it was transported to other European countries through the Ukrainian pipeline.
Flynn said that's another reason why President Biden's suspension of liquid natural gas (LNG) export permits is “absolutely ridiculous.”
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The market is reacting to all these factors. So what does this mean for consumers?
Flynn said that when natural gas prices spike like they did this week, it typically takes several months for the increase to reach consumers, depending on where they live and how their local utility company operates. It is said that it will take a while.
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Either way, Americans who live in areas affected by cold snaps tend to turn their thermostats higher and run their heaters around the clock when temperatures drop, which can quickly add up to your bill based on usage alone. is expected.
“Consumers feel that way primarily because usage is going up and prices are going up,” Flynn told FOX Business. “It's a double whammy.”
