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LNG: European Natural Gas Rises To New Winter High As Outages Continue

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European natural gas prices rose sharply on Wednesday to reach their highest level since Q4 2023 driven by rising carbon prices, supply disruptions and cold weather at a time of significant inventory drawdowns. Storage levels are now around 55% full, according to Bloomberg, versus 72% a year ago. They were up 6.8% to EUR 51.49 yesterday to be 5.3% higher in January.

  • European markets have been rattled by continued outages at the US’s Freeport LNG export facility and disruptions in Malaysia from flooding. The easing of unplanned capacity restrictions in Norway has been delayed.
  • Summer refilling remains a concern as the region competes with Asia for global supplies. Asian LNG demand for cooling rose strongly last summer and in the immediate future, temperatures are forecast to drop after mild winter weather.
  • US gas rose 1.8% to $3.18 to be up 2.6% this month (March contract) driven by a forecast of EIA inventory data showing a greater drawdown than the 5-year average of 314 bcf. Bloomberg notes that storage is around 0.7% above the average. Cold weather increased heating demand this month but the southern US is expected to see warmer weather at the start of February.
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European natural gas prices rose sharply on Wednesday to reach their highest level since Q4 2023 driven by rising carbon prices, supply disruptions and cold weather at a time of significant inventory drawdowns. Storage levels are now around 55% full, according to Bloomberg, versus 72% a year ago. They were up 6.8% to EUR 51.49 yesterday to be 5.3% higher in January.

  • European markets have been rattled by continued outages at the US’s Freeport LNG export facility and disruptions in Malaysia from flooding. The easing of unplanned capacity restrictions in Norway has been delayed.
  • Summer refilling remains a concern as the region competes with Asia for global supplies. Asian LNG demand for cooling rose strongly last summer and in the immediate future, temperatures are forecast to drop after mild winter weather.
  • US gas rose 1.8% to $3.18 to be up 2.6% this month (March contract) driven by a forecast of EIA inventory data showing a greater drawdown than the 5-year average of 314 bcf. Bloomberg notes that storage is around 0.7% above the average. Cold weather increased heating demand this month but the southern US is expected to see warmer weather at the start of February.