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LNG: Cold January To Boost Gas Demand For Heating

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European natural gas prices fell sharply on Monday likely because of technical selling. They trended lower through the session to finish down 4.9% at EUR 47.21, the lowest since before Christmas, and down 3.4% this month. This is despite drawing from inventories at the fastest pace in seven years. The weather is forecast to stay cold across north-western Europe for now increasing heating demand.  

  • European storage is around 70% full compared to 86% this time last year, according to Bloomberg. Energy provision through winter is unlikely to be disrupted but low inventories may make refilling during spring/summer more challenging.
  • US gas rose 10.7% to $3.71 to be up 2.2% in January to date as severe wintery weather boosted heating demand and impacted some gas output and pipelines. Forecasts are signalling that temperatures are likely to remain below average to January 21 and frozen gas infrastructure is expected to increase.
  • Global demand for US LNG has been strong and Reuters is reporting that some traders believe prices rose sharply due to close to record flows to LNG export facilities.
  • After the pipeline to Europe through Ukraine was shut on January 1, Russia is looking at other buyers for its gas. It is planning to increase its LNG exports, which Europe has bought a record amount of, and pipeline flows to China. 
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European natural gas prices fell sharply on Monday likely because of technical selling. They trended lower through the session to finish down 4.9% at EUR 47.21, the lowest since before Christmas, and down 3.4% this month. This is despite drawing from inventories at the fastest pace in seven years. The weather is forecast to stay cold across north-western Europe for now increasing heating demand.  

  • European storage is around 70% full compared to 86% this time last year, according to Bloomberg. Energy provision through winter is unlikely to be disrupted but low inventories may make refilling during spring/summer more challenging.
  • US gas rose 10.7% to $3.71 to be up 2.2% in January to date as severe wintery weather boosted heating demand and impacted some gas output and pipelines. Forecasts are signalling that temperatures are likely to remain below average to January 21 and frozen gas infrastructure is expected to increase.
  • Global demand for US LNG has been strong and Reuters is reporting that some traders believe prices rose sharply due to close to record flows to LNG export facilities.
  • After the pipeline to Europe through Ukraine was shut on January 1, Russia is looking at other buyers for its gas. It is planning to increase its LNG exports, which Europe has bought a record amount of, and pipeline flows to China.