News about the oil and gas market has surprised Europe. Gas price has reached $1,000 per 1,000 cubic meters for the first time in its history. Notably, the US also reported on a jump in gas prices.
On September 28, at the beginning of the European session, gas futures skyrocketed to a new all-time high, exceeding $1,000 per 1,000 cubic meters. Thus, the price went well above the previous record logged in March 2018. Notably, three years ago, Europe faced a bitterly cold Siberian front dubbed the Beast from the East. As a result, the price of gas jumped to $969 per 1,000 cubic meters.
In Europe, gas prices advanced following a rise in the Asian region. A day earlier, the S&P Global Platts JKM, the benchmark for spot deliveries into North Asia, reached $1,042 per 1,000 cubic meters. At the moment, the European market is suffering a significant deficit of gas and has to compete with the Asian market.
According to Bloomberg, a sharp rise in gas prices was recorded all around the world. The situation is deteriorated by small gas reserves in Europe and Asia. This, in turn, causes concerns about a possible gas shortage ahead of the winter season. What is more, gas production is likely to remain the same in the following months. That is why it will be rather difficult to build up reserves. At the same time, export enterprises of the eurozone and the Asian region are working at full capacity, trying to meet the mounting demand. However, this will hardly settle the problem. Analysts suppose that the global gas deficit will widen.
The US has also faced such a problem. There, the price of gas is also soaring. On September 28, gas futures reached a record high last seen 7 years ago. By the moment, November futures advanced by 4.9% to $6.15 per MMBtu. During the trading session, the price jumped to $6.3 per MMBtu, reaching the record reading for the first time since February 2014.
Experts emphasize that it is difficult to predict a further movement of gas prices. At the same time, concerns are rising as a jump in the price of gas is taking place just at the beginning of the heating season of 2021-2022. Some analysts foresee a further rise, still hoping that the situation will stabilize.
