[Editor's note: A version of this story appears in the August 2021 issue of Oil and Gas Investor magazine.]

U.S. natural gas prices are higher this year than in 2019. They’re a lot higher. And not just in winter-month futures. The difference between shoulder-month pricing and winter-month pricing was barely recognizable in June.

And, overall, prompt-month prices grew to above $3 and to as much as nearly $4 for all months heading into next May. (2020 is excluded in comparisons because, well, 2020.)

The 12-month strip the morning of June 29 was $3.45. The August contract was $3.59. The January 2022 contract was about 20 cents— just 5.6%—more than the August contract. A “heat dome” over the Pacific Northwest had raised alarms that may have prompted some of the June 29 pricing. So, using pricing on the uneventful June 15 instead, the August contract was at $3.27, while January 2022 was $3.51—a 7.3% difference.

In the past decade, shoulder-month prices have been as much as 50% or more less than winter pricing. Is 2021 just a one-year anomaly? Or are enormous, seasonal variations in natgas pricing diminished forever as the new 24/7 baseload of up to as much as 20 Bcf/d at times in LNG and Mexico exports soften the U.S. winter-heating blow?

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