Natural gas flares are seen at an oil pump site outside of Williston, North Dakota.

US natural gas prices could spike as much as 60% this winter, a Truist analyst said.
Domestic inventories of liquefied natural gas are low and US production capacity is near 90%.
The crunch is exacerbated by the fact that the US has become the world’s top LNG exporter.

US natural gas prices could spike as high as 60% this winter as the global energy crisis drags on, according to estimates by Truist director Neal Dingmann. 

“Natural gas prices this year have hit 14-year highs, and we don’t think that’s the end of it. We think we could even see a super-spike potentially this winter that we would put them back to 20- or 25-year highs,” Dingmann said in an interview with CNBC.

Henry Hub natural gas is currently priced at $9.35 per million British thermal units as of 1:00 pm ET. Dingmann thinks that could surge to $12-$15 in the upcoming months, which could represent a hike of 22%-61%. 

That threatens to send the US into its own energy crunch this winter alongside Europe, with constraints largely driven by the limitations to how much gas US companies can produce.

“The story is capacity, capacity, capacity, and that’s just lack thereof,” Dingmann said, pointing to the fact that additional production capacity of  liquid natural gas is currently around 10% in the US. Natural gas production has also fallen 1 billion cubic feet a day, according to data from Bloomberg.

And there’s little supply to fall back on. Five-year natural gas inventory levels are near their lowest levels in five years Dingmann said, and stockpiles that are typically relied on during the winter are 10% lower than normal, a Bloomberg report found.

The situation is exacerbated by the fact that the US has become the world’s number one LNG supplier, largely to give a helping hand to Europe as the continent gears up for winter without Russian energy supplies. The US Freeport LNG export hub, which covers around 20% of US exports, will partly reopen in October and is expected to increase output  but skim more off US supplies.

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