Jolyon@jolyon

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Natural gas price gap: US vs Europe

Europe absorbs a punishing bill for NATURAL GAS every winter, and the number behind it is stark: roughly $3 in AMERICA against more than $30 on the European side. That kind of spread is hard to believe until you see what traders do with it. They pick up the cheap U.S. supply, chill it down into LNG, put it on a boat, and sell into a market paying several times the original sticker. And that is happening, not hypothetical. Scaling it, though, runs into a wall. Liquefaction plants, LNG tankers and the import terminals Europe has to receive at all limit the volume that can physically move, which means the gap cannot be closed quickly no matter how obvious the money looks. The arbitrage is right there in the open. So where does the responsibility sit for a disparity this wide, and for Europe carrying the cost each winter? Source: The Merchant's News / Writer: Naz #UnitedStates #Finance

1h

Jolyon@jolyon

Follow

Natural gas price gap: US vs Europe

Europe absorbs a punishing bill for NATURAL GAS every winter, and the number behind it is stark: roughly $3 in AMERICA against more than $30 on the European side. That kind of spread is hard to believe until you see what traders do with it. They pick up the cheap U.S. supply, chill it down into LNG, put it on a boat, and sell into a market paying several times the original sticker. And that is happening, not hypothetical. Scaling it, though, runs into a wall. Liquefaction plants, LNG tankers and the import terminals Europe has to receive at all limit the volume that can physically move, which means the gap cannot be closed quickly no matter how obvious the money looks. The arbitrage is right there in the open. So where does the responsibility sit for a disparity this wide, and for Europe carrying the cost each winter? Source: The Merchant's News / Writer: Naz #UnitedStates #Finance

1h