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Investing.com - US natural gas prices retreated Wednesday, falling back from their highest levels in two years in Europe following a report that the European Union is weighing up capping prices.
At 05:05 ET (10:05 GMT), natural gas prices fell 0.7% to $3.496 per million British thermal units, or MMBtu, retreating from levels last seen at the end of 2022.
The Financial Times reported Wednesday that the EU is considering new powers to temporarily cap EU gas prices, which have recently hit record levels compared with the US.
European natural gas prices traded between three and four times higher than in the US, the report said, and the European Commission is considering a cap as part of discussions about a “clean industrial deal” policy document to be presented next month, the report stated.
Natural gas prices had soared to the highest levels in two years, boosted by rising demand as a result of low temperatures in many parts of northern Europe.
These chilly conditions are expected to continue over the coming days, and the associated demand is set to cause European gas reserves – already at their lowest level since the start of the energy crisis in 2022 – to fall even further.
Demand appears to be growing elsewhere as well, with India’s natural gas consumption set to jump 60% between 2023 and 2030, the International Energy Agency said on Tuesday.
This would double the country’s need for liquefied natural gas imports, as domestic output is expected to grow much more slowly than demand, according to the IEA.
Rapid urbanisation and industrialisation are set to transform the energy market in the world’s fifth-largest economy and drive gas demand growth through the end of the decade and possibly beyond that, the IEA said in a report.
Traders are also looking to the White House for any indication that President Donald Trump is set to announce more tariffs on the EU, having already called on Europe to purchase more American oil and gas to avoid tariffs.
The US is already Europe’s largest supplier of liquefied natural gas.