Natural gas prices rise amid US production drops and global supply constraints

Natural gas prices in the United States have risen to $2.90 per MMBtu, driven by a decline in domestic production and a surge in LNG exports. Production in the Lower 48 region fell to 111.7 billion cubic feet per day, a two-week low, while daily gas flows to nine major LNG export facilities reached a 20-week high of 18.8 billion cubic feet.

Globally, supply constraints are being exacerbated by conflicts in the Middle East, which have removed approximately 36 million tons of LNG from the market. This shortage has caused Asian spot prices to climb from pre-war levels of roughly $10 to nearly $30 per MMBtu.

In response to these high costs, major energy consumers like China and India are shifting toward cheaper alternatives, such as coal and oil, to power electricity generation and industrial sectors. Meanwhile, European markets are competing for limited LNG cargoes ahead of the winter season.