Gas Prices Continue Trending Down As Demand Below Seasonal Norms

LNG prices moved lower over the week with Europe down 3.6% on Friday to be 8.5% lower on the week as the winter and heating season approach their end and February is expected to stay mild. Prices reached a low of EUR 26.60 and finished not much higher at EUR 26.80.

• Risks to supply from tensions in the Middle East remain with LNG shipments from Qatar already delayed as they are rerouted around southern Africa. Sanctions against Russian LNG are also being reviewed.
• European summer LNG contracts are trading at a premium signalling that there is some concern in the market regarding rebuilding supplies ahead of next winter.
• US natural gas prices continued to trade below the key $2 level on milder weather and strong flows. They fell 2.9% on Friday to be down 10.5% last week and 20% lower in 2024 to date. Temperature forecasts have been revised up for the East Coast and a lot of the southern US for February 19-23 according to the Commodity Weather Group. Output on Friday was 5.4% y/y higher.
• A vote to derail the US government’s pause on new LNG export approvals may occur as soon as Wednesday.
• North Asian gas prices are little changed given China’s week long Lunar New Year holiday and plentiful supply.