Natural gas prices have increased by 27% since the beginning of this year.

The price of natural gas on the New York Mercantile Exchange (NYMEX) for April 2022 contracts closed at US$4.754 per Million British Thermal Unit (MMBtu) on Monday, March 8, 2022. This represents a 5.4% decrease from the previous closing price of US$5.016 per MMBtu.

Tensions between Russia and Ukraine have driven up natural gas prices throughout the year. Compared to the end of last year, natural gas prices have increased by 27.21% year-to-date (YTD) as of March 3, 2022. Similarly, compared to March 8, 2021, natural gas prices have surged by 78.12%.

Natural gas prices even reached their highest level of US$6.265 per MMBtu on January 27, 2022, before subsequently declining, as shown in the graph.

Following Russia's attack on Ukraine on February 24, 2022, prices of energy commodities such as crude oil and coal have risen, including natural gas. Sanctions imposed by Western countries on Russia for its invasion of Ukraine have raised concerns about disruptions to the global supply of energy commodities, particularly in Europe.

Russia is a major supplier of energy commodities to Europe. The ban on imports of energy commodities from Russia will lead to supply shortages in Europe, triggering a rise in energy commodity prices.

(read: What Russian Commodities are Essential for the European Union?)