Where do we stand on Natural Gas and European Inflation.

Are we looking at the wrong stats to determine whether we will have a recession in the U.S.? Slowly, concern for China's economy has edged into the picture, but not much is being said about Europe. 

Frankly, I don't see how Europe can avoid a recession and I wonder how that will impact the U.S. It is clear for all to see, the impact of natural gas will have on Europe. These aren't small numbers.

When you hear reports of the U.K. raising the cap to £4,200 annual, it might be overlooked that in early summer of last year... it was about £1,200 annual. Currently the cap is about £2,000 annual. Here is the latest futures, converted to USD...

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Inflation in Europe is edging up, even while the governments are trying to keep a lid on the natural gas impact to consumers. 

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Maybe a chart would be better...

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Generally speaking and from I can glean... the German natural gas storage is 78% of capacity, with a goal of 90%... just to get through this winter and then the cycle continues. The U.K. is near capacity and is using its LNG facilities to export to Europe. As winter nears the expectation is for U.K. prices to soar to that £4,200 annual.

Considering that not long ago, Asia was the recipient of one half of LNG. They are being subjected to very high LNG prices as well.

The U.S. is not immune to upward natural gas prices, but not to the extent of Europe. The recent CPI report seems to have somewhat mirrored the ebb and flow of Nat/Gas prices, but the ebb may be over, as the flow via LNG, is set to restart with Freeport and where there is money to be made... more facilities will come on line. Drawing against U.S. reserves. 

It was Freeport going off line, which created the dip, as the draw on reserves slowed.

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https://www.eia.gov/naturalgas/weekly/#tabs-prices-3

While this chart indicates some slipping in July, due to Freeport being offline, the current NatGas price is about $9 and expected to continue climbing as LNG exports pick up. While Freeport is not slated to come back on line until an October restart... the draw has begun.

Month to Month
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That July drop will reverse in August.

And it should not go unnoticed... electricity prices have been on a steady upward swing, which with about 40% of our electricity coming from natural gas generation. Winter is nigh upon us. Gasoline may be ebbing (?), but the rest of the overlooked energy index is not, and it will likely be overlooked until those heating bills come into play.

We have gotten rather used to cheap natural gas and those days are in the rear view mirror, imo. So what are natural gas stocks for the U.S. compared to last year.

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https://www.eia.gov/naturalgas/weekly/

3375Bcf last year to 2519Bcf this year, or down 25.3%. Certainly within the 5 year average, but only 119Bcf above the minimum.

Let's hope for a very mild winter.