The price hike is being driven in part by high demand. High temperatures across the US have resulted in consumers turning up their air conditioning, causing power plants to burn more fuel to meet electricity demand. Rob Thummel, senior portfolio manager at Tortoise Capital Advisors, suggests that "we need more USA natural gas production. The production levels are too low," which sheds light on a larger problem for the gas market: inventory levels are below historical averages, leaving the US market with less of a buffer and driving up prices.
Peter Rosenthal at consultancy Energy Aspects, points to data highlighting a recent slowdown in output from new shale oil and gas wells because of reduced drilling, bottlenecks in the pipeline network, and rising production costs. For example, the almost doubling of the price of drill pipe has led to shale drillers increasing production more slowly.
How has this affected Recruitment in Gas Trading?
Two recent reports by Reuters show an uptick in commercial recruitment both in the gas and LNG spaces. Earlier this year Reuters reported an increase in the number of traders being added to gas trading desks driven by the outsized returns many of these trading shops saw in 2021, and just last week we saw how several LNG companies, in anticipation of reaching FID, have started recruiting gas trading and supply teams.
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Managing Director | Partner, Americas
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