European Prices Higher As Stored Supplies Decline

European LNG prices rose 2.6% to EUR 40.33 on Thursday as cold weather is increasing demand and stocks are down. Temperatures are expected to rise to above average next week. They are lower than the high of EUR 41.03 reached early in the session. They are down 4.2% in December to date.

• European inventories have been used during the current cold snap but are still high at 93% of capacity. Analysts are now expecting levels to drop below 2023’s end winter level, which could make the summer refill difficult, which may buoy LNG prices in 2024. Stronger flows from Norway should be helpful though.
• US natural gas prices fell 0.5% on Thursday to be down 8.7% this month. Forecasts remain mild for most of the country heading to mid-month. Output remains strong.
• North Asian gas prices have been steady this month down only 0.5%. They rose 0.3% yesterday supported by China’s trade data signalling that demand could be recovering with gas imports up 6.2% y/y, highest in just under 2 years.