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Worst Natural Gas Volatility Since 1996 Could Sting Property Owners

Natural gas prices have been on a rollercoaster ride in recent days because of a deep freeze throughout parts of the U.S., including Texas. Bloomberg reports that one measure of natural gas volatility is at its highest since 1996. Tensions between Ukraine and Russia could further shock gas prices.

All of this is unwelcome news for property owners, as commercial buildings heavily rely on natural gas for space heating. A winter storm recently blanketed much of the central U.S. and reported blackouts are expanding in Texas, where some fear gas wells will freeze and power plants will go offline.

A U.S. government tally of gas inventories shows the biggest withdrawal since the Texas freeze-out in February 2021, as stored supplies remain 15 percent below the level from last year. Meanwhile, the Biden administration has discussed stepping up production of liquefied natural gas to several companies and countries in Europe in the event of a Russian invasion of Ukraine, CNN reports.

Russia currently supplies Europe with more than 40 percent of its natural gas, according to Eurostat. A Russian invasion would severely impact global energy markets and worsen inflation.

All this volatility could push natural gas prices higher and put a squeeze on property owners’ budgets. Then again, many have said lately the era of cheap natural gas is over. It’s even more reason to look into electrification of building systems and improve HVAC efficiency to stem high heating costs.

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