It’s been 35 years since the natural gas markets became deregulated. During that time, the reliance on natural gas as a heating source and an exportable commodity to the rest of the world has grown exponentially. While there are multiple factors affecting natural gas prices on a daily basis, two main drivers that have evolved in recent times are winter weather in the United States, as well as the growing LNG trade with Europe and Asia.
One only has to look at the significant impact to natural gas prices trading at multiples of 30, 40 or even 50 times during Winter Storm Uri in February 2021. The start of the Russian-Ukraine last year was another shock to US natural gas prices as Europe was exposed to a dramatic loss of supply from its top natural gas exporter – Russia.
Virtually every commodity procurement team has the same goals – to meet or beat budget, to untangle…
