Understanding Natural Gas Price Behaviour
This page provides analytical context to complement monthly natural gas price indicators for the United States, Europe, and Japan. It highlights long-term averages, volatility patterns, structural regime shifts, and regional price differentials.
All statistics shown below are computed directly from monthly price data beginning January 1977.
Long-Term Price Statistics (1977–Present)
| Market | Average | Volatility | Minimum | Maximum | Range |
|---|---|---|---|---|---|
| US Gas | 3.18 | 2.01 | 0.67 | 13.52 | 12.85 |
| Europe Gas | 6.35 | 6.60 | 1.58 | 70.04 | 68.47 |
| Japan LNG | 7.29 | 4.43 | 2.72 | 23.73 | 21.01 |
| Europe–US | 3.17 | 5.98 | -6.30 | 61.26 | 67.55 |
| Japan–US | 4.11 | 4.15 | -7.04 | 16.92 | 23.97 |
| Japan–Europe | 0.93 | 4.36 | -48.83 | 8.50 | 57.33 |
Long-term averages mask substantial dispersion in natural gas prices. Volatility and range measures highlight the structurally fragmented and shock-driven nature of regional gas markets.
Volatility and Market Shocks
The highest sustained volatility in US natural gas prices occurred in April 2009, reflecting the sharp demand and storage disruptions during the global financial crisis.
Structural Shifts in Natural Gas Markets
| Period | US Gas | Europe Gas | Japan LNG |
|---|---|---|---|
| 1977–1999 | 1.91 | 3.01 | 4.02 |
| 2000–2007 | 5.70 | 5.31 | 5.53 |
| 2008–2014 | 4.58 | 10.60 | 13.64 |
| 2015–2019 | 2.76 | 5.92 | 9.63 |
| 2020–Present | 3.41 | 15.96 | 12.79 |
Unlike crude oil, natural gas markets have remained only partially integrated. Structural shifts in LNG trade, shale gas production, and geopolitical risk have led to persistent regional price divergence.
Why Regional Price Differentials Matter
Europe–US and Japan–US price differentials reflect infrastructure constraints, LNG availability, and regional supply security. The sharp widening of these spreads after 2020 highlights the limits of global gas market integration.
Methodology Note
All statistics are computed using monthly price data from January 1977 onward. Volatility is measured as standard deviation. Regime periods are defined to reflect major structural shifts in global and regional gas market behaviour.