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Traders Watching U.S.-U.K. Gas Price Spread The price at Louisiana’s Henry Hub and that at the U.K.’s National Balancing Point hub are closely watched by gas industry players trying to gauge whether LNG cargoes will be shipped to North America or to the British Isles.
Gas traders monitor LNG movement because increased shipments of LNG can put downward pressure on gas prices at their destinations.
As LNG capacity in the Atlantic Basin increases, the actual U.S.-U.K. price spread could become more widely traded.
Before mid-2007, U.S. gas prices were higher than those at NBP—but increased domestic production changed that, driving U.S. prices much lower. In recent weeks, though, the spread has gotten smaller due to the U.K.’s efforts to absorb excess LNG cargoes at low prices.
This winter’s weather and economic recovery could affect gas prices in either country—and signs are being closely watched by traders. |
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