U.S. natural gas futures closed at their highest price since June 10 , with the contract for August delivery ( NG1:COM ) settling +5.2% at $8.727/MMBtu on Monday to extend a ~60% rally this month, as some of the highest temperatures on record across the U.S. continued to boost power demand.
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The rise in U.S. prices also follows a rally in European gas prices, with Dutch TTF benchmark futures up nearly 12% after Russia's Gazprom said natural gas exports through the Nord Stream pipeline to Germany would drop to just 20% of capacity , which could eventually boost demand for U.S. shipments of liquefied natural gas.
The European price, after conversion, would be ~$52/MMBtu, according to Avi Salzman of Barron's - an enormous premium to U.S. prices.
Without sufficient Russian supplies, Europe likely will need to ration power use and import more gas from elsewhere, which would place U.S. gas producers in a strong position to profit as importers turn to them for gas supplies.
EQT Corp. ( NYSE: EQT ), the largest domestic producer, closed +6.5% on Monday; other U.S. gas-focused companies also surged, including ( CRK ) +9.8% , ( SWN ) +9.7% , ( RRC ) +7.1% , ( AR ) +6.6% , ( TELL ) +5% , ( LNG ) +4.4% , ( CTRA ) +4.2% , ( CHK ) +2.8% .
The European Union proposed a plan last week for member states to cut gas usage by 15% through March , but some governments demanding more flexibility are forcing the EU to consider revising the plan .
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Natural gas jumps 5% on U.S. heat wave, Europe's dire straits