00:00So, Dan, wild swings, really, when it comes to US nat gas prices. Talk us through them.
00:05We've seen this huge arctic blast come down from the north.
00:10And that's done two things to the natural gas industry.
00:14One thing it's done...
00:15You go out to West Texas, Colorado, these places where there's lots of gas wells.
00:20It's freezing equipment at wells and pipelines and processing plants.
00:23And that's cutting off natural...
00:25And then at the same time, you're just seeing people all over the country need to...
00:30to add more heat.
00:31You know, they're burning more gas to keep their house warm.
00:33They're running the electricity that's...
00:35burning more gas at power plants.
00:37And so, you know, you have a huge rise in demand.
00:40Pushed up against, you know, cuts in supply.
00:42And you see these huge price increases, you know...
00:45from January 16th to the 26th, the prices have almost doubled on the front month contract.
00:50And so, you know, anytime you see something like that, you're going to start to have some real big market...
00:55And just walk us through the international pricing dynamics here, because of course...
01:00the war on Ukraine had been a massive factor for Europe.
01:03Yeah, you know...
01:05Natural gas for ages had been a really sort of localized, decentralized market...
01:10the US natural gas market was one thing.
01:12Europe was its own thing.
01:13Asia was its own thing.
01:14But because of the...
01:15the rise of LNG trading, those are really kind of melded together.
01:18And as you mentioned, after Russia...
01:20invaded Ukraine, the...
01:21Europe really relied on US LNG imports.
01:25to keep afloat.
01:26And so what that means now is, you know, you have...
01:29normally...
01:30these LNG plants in the US, they buy their gas, they liquefy it, they ship it to Europe, they...
01:35pack away a tidy little profit.
01:36But right now, these higher prices are signaling to them...
01:40hey, you know, maybe we should instead supply our domestic buyers...
01:45who are paying a little bit more, you know, make sure that there's enough gas to go around.
01:48That, in theory, could...
01:50could eventually cut off supply to Europe.
01:52In reality, I think we're probably...
01:54this is...
01:55going to pass pretty quickly.
01:56You...
01:57you already look at the next month, natural gas futures...
02:00contract, it's significantly lower than the front month price.
02:02So this is probably a pretty...
02:04quick event.
02:05here.
02:06But over time, I mean, this is something that if you're in Europe, if you're in Asia, these...
02:10American cold snaps are really going to be something that could affect your gas supply.
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