To understand the recent increase in prices, we also need to look at the state of storage in the U.S., particularly in the South. That is where a significant part of American demand is found, including the demand from liquefaction and export terminals. There, as in most regions of the U.S., the level of storage of 970 Bcf is below historic levels, especially those of the past year.
By extrapolating the current storage level of 970 Bcf based on injection and withdrawal data for 2020-2021, we obtain a level of storage that could end up below historic averages by the end of February 2022. We can thus better understand the nervousness of markets regarding the sufficiency of storage to meet demand for gas this coming winter.
Whether this apprehension is founded or not, there is a need to stimulate a rise in current and future prices. As of August 31, 2021, the price of natural gas at Dawn Hub oscillates just above the bar of $5/GJ. For winter 2021-2022, markets are posting an average price around $5.30/GJ, based on the current gas environment.
These forecasts will continue to change based on certain data, including the pace of injection over the next two months, the level of production from the various production basins on the continent, as well as actual temperatures.