US Natural Gas Prices Rose by More than 5% after Europe Proposed to Impose a Ban on Russian Energy

SHANGHAI, Apr 6 (SMM) - US Natural gas rose to its highest closing price since January 27, closing at $6.032/MMBtu on Tuesday, an increase of 5.6%. Part of the reason is that further sanctions on the Russian natural gas supply may keep the US LNG exports close to the historically high level in the coming months.

Analysts at Price Futures Group told that if Europe reduces the purchase of coal from Russia or bans the import of natural gas from Russia,  in the coming months, the US will face greater pressure to deliver as much natural gas as possible to Europe.

According to Manish Raj of Velandera Energy Partners, the prices of US natural gas have risen due to the increase in coal prices. Last week, the coal prices in central Appalachia exceeded $100/short mt for the first time since 2008.

Raj believes that “as coal-fired power plants become more expensive, electric grids will look to natural gas-fired plants, thereby raising domestic natural-gas prices.”

In addition, the temperature in some areas is also expected to drop. For example, Atlanta will have a low temperature this weekend. However, analysts in NatGasWeather.com said that compared with the core winter, such a short increase in heating days had little effect on natural gas demand.

If Europe completely bans Russia's natural gas, oil or coal imports, it will mark a major shift in the region's strategy.