There was too much gas in the USA: record LNG exports do not save from low prices

Gas prices are falling in the USA. Even record LNG exports cannot compensate for the decline in demand with high production. Companies plan to reduce production.

The cost of gas on the American Henry Hub exchange dropped to $ 96 per thousand cubic meters. The last time such prices were seen was in August last year. At the same time, back in March, quotes were at $ 115, and in January, due to frosts, they rose to $ 264.

The reason was the high production during the spring decline in demand. If production is 3.4 billion cubic meters per day, according to the EIA, then consumption is at an average level of 2.55 billion cubic meters this year, and record LNG exports above 500 million cubic meters per day do not save the situation.

"While the rest of the world is worried about natural gas supplies, leading American gas companies are announcing "strategic cuts" in the 2nd quarter, as US production significantly exceeds demand," writes Bloomberg columnist Javier Blas in X.

Thus, EQT Corporation announced planned reductions and plans to produce up to 17.5 billion cubic meters in the second quarter.

The corporation expects an increase in electricity consumption in the United States and LNG exports, but not in the near future.

The situation with gas prices in the United States plays into the hands of LNG buyers from Europe, as standard contracts depend on quotations on the American stock exchange. However, in the European Union itself, gas continues to be almost 40% more expensive than in February before the Iranian war. Stopping LNG supplies from The Persian Gulf is forcing traders to buy fuel at a premium, as American exports will not be able to compensate for losses from the shutdown of LNG supplies from Qatar and the UAE.