Weather related disruptions, energy supply chain constraints, labor shortages impacting production and energy inflation all impact the cost of natural gas.
Natural gas fuels power plants that create electricity for customers. Its pricing can go up or down depending upon supply and demand in the gas markets worldwide. Natural gas makes up about a quarter of the world’s electricity generation and prices fluctuate depending on global economic circumstances.
According to the Environmental Defense Fund (EDF), after the U.S., Russia is the second largest producer of natural gas. The Russian war with Ukraine caused natural gas and gasoline prices to reach record highs. The war caused oil prices to skyrocket from around $76 per barrel to over $110 per barrel in March 2022.
The subsequent U.S. ban on Russian oil, which makes up 10% of the world’s oil supply, caused domestic energy prices to surge, according to the EDF. As the U.S. continues to ship large amounts of natural gas to Europe to make up for the loss of imports from Russia, utility bills may continue to be high for much of America.
Natural gas prices impact electricity prices and are the largest source of electricity generation, making up nearly 40% of U.S. power capacity, according to the U.S. Energy Information Administration. Increasing demand from other countries and severe winter climate has caused natural gas wholesale prices to surge.
Colder weather means more energy is being consumed to keep homes…
