US Natural Gas Prices Plunge After Fire at Texas LNG Terminal
2022.06.08 21:50
US Natural Gas Prices Plunge After Fire at Texas LNG Terminal
(Bloomberg) — US natural gas prices tumbled after a fire broke out at a Texas export terminal, threatening to leave supplies of the fuel stranded in shale basins despite surging overseas demand.
The fire is still burning at the Freeport LNG terminal in Quintana, Texas, about 65 miles (105 kilometers) south of Houston, according to a recording on the Brazosport Community Awareness & Emergency Response hotline. The incident occurred at about 11:40 a.m. local time on Wednesday and an investigation is ongoing, Brazosport CAER said in a tweet.
Freeport receives about 2 billion cubic feet of gas, or roughly 2.5% of output from the Lower 48 US states. The blaze could have a significant impact on global supplies of LNG as Europe clamors for cargoes after Russia’s invasion of Ukraine. US gas stockpiles, meanwhile, are well below normal for the time of year, while prices are trading at the highest since 2008.
The fire is “going to curtail exports and alleviate some of the strain on US supplies,” said John Kilduff, a partner at hedge fund Again Capital in New York. US consumers “should benefit from lower prices, but Europe and Asia will probably pay higher prices.”
US natural gas futures for July delivery slid as much as 9.3% to $8.427 per million British thermal units in New York after earlier rising as much as 4%.
©2022 Bloomberg L.P.
