Natural gas prices in the U.S. are down today after a small explosion Wednesday at Freeport LNG on Quintana Island. The export plant is likely to be shut down for at least three weeks, straining an already tight global gas supply.
The price of natural gas has skyrocketed recently to nearly four times the price seen in recent years as demand recovers from the pandemic but global supply remain tight. In a short-term outlook released this week, the U.S. Energy Department predicted the priceat an average of $8.69 per British thermal unit. Meanwhile, U.S. natural gas inventories are about 15 percent below the five-year average.
While natural gas prices will likely rebound soon, analysts say the disruption from the explosion at one of the largest U.S. export plants for liquid gas could lead to gas shortages in some parts of the world as countries move to ban Russian gas in retaliation for Moscow’s war against Ukraine. No injuries were reported from the explosion, and a company spokesperson says an investigation into the cause is underway.