By Anthony Harrup

Prospects of a colder Northern Hemisphere winter than in the previous two years could lead to tighter global natural gas supplies and push prices up, the U.S. Energy Information Administration said Monday.

Exceptionally mild weather the previous two winters kept natural gas markets well supplied and prices low, but that could change this winter.

"A cold winter with sustained, lower-than-normal temperatures in one or more regions in the Northern Hemisphere could occur as El Niño changes to La Niña this year," the EIA said, referring to a switch in climate patterns which it said could lift natural gas demand and create competition between Europe and Asia for spot LNG supplies.

La Niña generally brings colder, drier weather to the Northern Hemisphere.

Limited additions to liquefied natural gas export capacity are expected, with most of that in the U.S., while Europe could see less natural gas supplied by pipeline if the Russia-Ukraine natural gas transit contract isn't renewed when it expires at the end of the year, the EIA said.

Other risks to supply include start-up delays for new projects, availability of natural gas feedstock for export, unplanned outages at LNG export plants and geopolitical events altering LNG trade flows.

In the U.S., colder weather could reduce inventories and push up LNG export prices, with the possibility of unplanned outages and production freeze-offs adding further upward pressure on international prices, the EIA added.

In its most recent short-term energy outlook, the EIA estimated LNG exports from the U.S. will average 13.7 billion cubic feet a day this winter, 8% more than in the 2023-2024 winter. U.S. natural gas prices have risen sharply in the past week as the first freezing weather hit parts of the country and the EIA reported the first inventory withdrawal of the season.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

November 25, 2024 14:22 ET (19:22 GMT)

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