Why are gas prices going up?

In Europe, the price of gas has risen in a few months from $7.15/mmbtu to $31.05/mmbtu. But why has the price of gas risen so much? A question we will try to answer in this in-depth article that analyses the price of gas from 1960 to 2021 in Europe and America. Why are gas prices going up.

Why are gas prices rising

Let’s start by analysing the data first. The price of gas is rising, as can be seen in the graphs in both the United States and Europe and Japan. But it is especially in Europe where the figure has risen decisively. In fact, the price of natural gas has almost reached the reconduct in history from 1960 to 2021. In fact, the figure of 15.43 $/mmbtu, referring to October 2021, had only been reached and exceeded in 2009 when the financial crisis was exploding in the United States. Over time, despite some peaks such as the one in June 2013, the price has gone up and down, but never like the figure we are seeing in 2021.

But why has the price of gas risen so much in Europe? There is a first theme. Europe is not a big producer of natural gas, quite the contrary. The first country in the world for annual production is the United States with 766,200 million m3 in 2015. In second place is Russia with 635,500 and Iran with 174,500. In general, therefore, Europe is a major importer of natural gas and not a producer. The first element is therefore due to the fact that European countries do not choose the price but “suffer” it. The second key element is that, due to the Covid-19 economic crisis and the fast recovery, the demand for gas in this period is very strong. And because of the very strong demand from all the countries of the world, such as China and India, the price – as happens in the theory of supply and demand – has started to increase. If we add a third element to this second element, that is, the depletion of the European natural gas stock, this explains why we are seeing such high price variations in recent months.

Gas production

We have seen how prices have risen in such a short time. But which countries produce the most natural gas? At the top of this list is the United States. With 766,200 million m3 in 2015, the US is the world’s largest producer of natural gas. Russia is 131 million m3 behind it, with an annual production of 635,500 million cubic metres in 2015.

The other countries are far behind. In third place is Iran with 174.500 million cubic metres, in this case referring to 2014, followed by Qatar and Canada. The European Union as a whole produces something like 120,000 million cubic metres of natural gas. More than six times less than the United States of America.

Gas price near me

Many will ask: what does this mean for my life? The reality is that as the selling price increases, so does the price we pay for using it. That is why I have decided to add here some useful links to find out the “price of gas near me”.

A very interesting first site is the AAA Gas Price site which shows daily updated data on regular, mid-grade, premium and diesel prices. For Regular, the highest price is in California with $4.626 and in Hawaii with $4.341. The lowest price is in Oklahoma with $3.034.

To find out the price of petrol in Europe, I recommend tolls.eu, which shows up-to-date data for many countries.

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