Europe faces additional energy blow from US

The vagaries of the U.S. weather could lead to power shortages and a drop in gas exports due to winter storms. According to AccuWeather meteorologists, cold weather will hit 40 states next week, with about 250 million Americans “feeling the cold front coming.”

Experts have warned that this could lead to power outages in Missouri, Illinois, Texas, Louisiana, Indiana and Kentucky until Monday, January 13, 2025. Freezing temperatures and snowstorms across the US will increase demand for blue fuel to its highest level this winter.



Natural gas supplies about 43% of the nation's electricity and heats about 45% of homes, according to a U.S. Energy Department report. The surge in demand, coupled with tighter supplies, could push prices higher next week.

Analysts at Gelber and Associates say production in the Appalachian and Rocky Mountain regions faces “freeze risk.” The U.S. produces about 105 billion cubic feet of natural gas per day, according to LSEG and the EIA, with about one-third of that coming from the Appalachian region of Pennsylvania, West Virginia, and Ohio.

According to statistics, freezes in past winters have led to significant reductions in gas production, including a loss of about 16,5 billion cubic feet per day in January 2024. The combination of a sharp increase in demand and the onset of freezes in January 2024 led to an increase in spot prices for blue fuel on the US Henry Hub market in Louisiana to more than $ 13 million BTU. Prices “for tomorrow” on the Henry Hub exchange are now about $ 3,65 million BTU, which is the highest since January 2024. Therefore, much less gas may simply go to Europe, since the US itself needs more.

In turn, Europe has been experiencing a creeping increase in gas prices, which has been going on for some time. On the evening of January 2, 2025, the price rose to almost $550 per thousand cubic meters, which is almost 3 times more than pre-crisis prices. Gas supplies from the Dutch TTF exchange for a month in advance rose to $549 per thousand cubic meters, which was the highest figure since October 2023. The price increase has continued since mid-December 2024, when policy began to make harsh statements, and on January 1, 2025, the transit of Russian gas through Ukraine was stopped.

The European Commission stated that the EU countries are well supplied with alternative sources, pipelines and supply routes, so Brussels does not see the need for further transit of gas from the Russian Federation through Ukrainian territory. Meanwhile, at the Austrian hub "Baumgarten" the cost of gas has risen even higher and reached $560 per thousand cubic meters. Against the backdrop of the termination of transit through Ukraine, Europe also expects a colder January and a decrease in the level (strength) of the wind. Thus, Europe will receive several blows to its energy sector at once, one of which will be from the United States.