UK prices are quoted in therms, us prices are quoted in MMBTU. 1 MMBTU = 10 therms.
1 MMBTU is trading for approx $2.5, 1 UK therm is trading at 143p (circa $1.70), what is driving this nearly 7x difference between UK and US prices?
In: 5
A lot of factors will go into this, but one is where the gas is produced. The US has a surplus of natural gas. It can produce so much that it could replace Russia as Europe’s supplier if LNG infrastructure is ramped up. The UK on the other hand has to import most of their gas and like most of Europe they were dependent on Russia. They also have little storage space, which means they can’t really stock up on natural gas like Germany can. Russia has made all this worse. Also, a lot of economic forecasts have the UK performing particularly bad the next few years, driving fears of inflation outpacing other countries like the US.
Basically, a combination of very real problems and speculation.
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