(Bloomberg) -- US natural gas prices rose above $10 per million British thermal units for the first time since 2008, extending a scorching rally driven by persistent concern that global stockpiles of the heating and power-plant fuel aren’t enough to meet winter demand.
Gas prices have surged all over the world after Russia’s invasion of Ukraine intensified a global energy crunch, leaving countries scrambling to secure scarce cargoes of liquefied natural gas. European gas supplies are a concern after an unusually hot summer, leaving the region more reliant on cargoes from exporters including the US to shrink the shortfall.
The key Nord Stream pipeline from Russia to Germany will stop for three days of maintenance on Aug. 31, raising concerns that the conduit won’t restart as planned after the work.
In the US, inventories are well below normal after blazing summer heat boosted electricity demand. Production from shale fields, meanwhile, has been growing only modestly. US exports dropped after an explosion at a key terminal in Texas in early June, but they’re expected to rebound in October as the facility restarts.
In past years, power plants would switch to burning coal when gas prices soared, but that’s happening less and less because of climate concerns. That means a traditional ceiling on demand that used to prevent US gas prices from skyrocketing has been largely removed.
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