Europe’s Gas Is Pricier Than Ever Relative to U.S. Supplies

(Bloomberg) -- European natural gas has never been more expensive relative to U.S. supplies amid a spiraling Old World energy crisis as winter descends across the northern hemisphere.  

Benchmark Dutch gas futures were almost $40 per million British thermal units costlier than the front-month U.S. contract on Tuesday, the widest margin in data going back to 2017. European supplies of the furnace and power-plant fuel are so dear that importers are outbidding Asian rivals for seaborne cargoes, a rare flipflop during the peak-demand season.   

Europe’s gas stockpiles are perilously low and may not have much chance to build as an early-winter cold wave prompts residents to burn more of the fuel than usual. Intertwined geopolitical and regulatory disputes between continental powers and Russia are heightening anxiety over whether Europe’s biggest gas supplier can or will plug the gap. 

In the U.S., meanwhile, winter has kicked off warmer than normal, sending gas prices down more than 40% since the futures touched a 12-year high of $6.466 in early October. Domestic gas demand was 15% below the year-earlier level on Tuesday amid, according to estimates from BloombergNEF. U.S. output rose 3.1% over the same timespan.

(Adds domestic output increase in final paragraph. An earlier version of this story corrected the U.S. gas price decline.)

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