Natural Gas Price Contrasts

7 What is Driving Feedstock Price Increases and Volatility I 203 

3% sulfur 6 Kiel oil (HSFO) 1% sulfur 6 fuel oil (LSFO) 2 fuel oil (distillate) 

There seems little likelihood of the USA regaining its advantaged low-price position on natural gas without government intervention, given the growing demand for natural gas as a power plant fuel. At the same time, US natural gas prices are likely to continue to show extreme volatility during peak demand periods such as extreme cold or hot weather, swinging between several levels such as fuel oil and distillate equivalence and possibly further influenced by liquefied natural gas (LNG) and Canadian gas flows to the USA. 

In direct contrast to North American chemical companies, the chemical makers already sourcing their natural gas feedstock in the Middle East or in other low-priced locations such as Trinidad have seen their advantage multiply as crude oil prices and North American natural gas prices rose (Fig. 16.3). 

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