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The most important reasons for the rise in gas prices in North America.. Get to know them

The LNG and Hydrogen Developments Report stated that natural gas prices in North America, according to the Henry Center, increased during the second quarter of 2022 to $7.48 million British thermal units, due to insufficient US production to meet growing consumption, in addition to the high demand for LNG exports. Of the American projects, where gas prices, according to the Henry Center daily, recorded their highest value since 2008, by exceeding $ 9 per million British thermal units.

The report issued by the Organization of Arab Petroleum Exporting Countries “OAPEC” indicated that with the entry of the third quarter, prices continued to soar at high levels due to the hot weather wave and then the high demand for electricity, in addition to the decline in US gas stocks below the usual seasonal level and the increase in European demand for gas exports. Liquefied natural gas from the United States, so that the average gas price, according to the Henry Center, during the third quarter of 2022 is about $ 8 / million British thermal units.

The report, prepared by Engineer Wael Hamed, an expert in gas industries at OAPEC, added that with regard to the prices of liquefied natural gas shipments sold in Asia according to long-term agreements linked to the price of US Brent crude (the price equation is based on a coefficient of 12-13% of the price of Brent crude per million). British thermal units, according to the terms of the contract, increased during the second quarter of 2022 to $12.5 per million British thermal units, thanks to the rise in Brent crude prices, which averaged about $118 per barrel during the same period.

He mentioned the rise during the third quarter to $14.9 per million British thermal units. Because of the huge jump in spot gas prices in the Asian region, the difference between spot prices and prices linked to Brent crude continued to widen in favor of spot prices, which confirms the importance of long-term contracts in stabilizing gas prices and limiting sudden fluctuations that the European market suffers from.

WhatsApp photo 2023-01-03 at 16.46.04

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