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Gas Prices Higher In May, Supply In Focus

LNG
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European LNG traded in a narrow range on Wednesday rising 0.9% to EUR 33.83 after a high of EUR 34.40 and a low of EUR 33.05. The market is determining the supply/demand balance. Prices are still over 16% higher this month.

  • European storage levels are seasonally high and are expected to be at 100% in October. But the region now competes with Asia and South America for gas supplies since Russia’s invasion of Ukraine. It has built up its renewable power capacity which has helped, but Norway’s maintenance season is being monitored for any unexpected delays.
  • Intercontinental Exchange reported investment funds’ net long positions in benchmark Dutch futures rose 32% w/w last Friday, highest since before early 2022, according to Bloomberg.
  • Argentina has had to buy from the global gas market as temperatures drop while the full opening of the Nestor Kirchner pipeline has been delayed.
  • US natural gas fell 5.9% to $2.66 but is still up almost 15% in May. The move lower was driven by forecasts for cooler weather in northeastern and central US for June 8 to 12, according to Maxar Technologies.
  • The EIA reports last week’s US gas stocks later today and according to Bloomberg consensus they are expected to rise 77bcf.
  • North Asian prices fell 1.5% on Wednesday to be up 18.8% this month but the resumption of the downtrend is not expected as demand is likely to remain strong in coming months.
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European LNG traded in a narrow range on Wednesday rising 0.9% to EUR 33.83 after a high of EUR 34.40 and a low of EUR 33.05. The market is determining the supply/demand balance. Prices are still over 16% higher this month.

  • European storage levels are seasonally high and are expected to be at 100% in October. But the region now competes with Asia and South America for gas supplies since Russia’s invasion of Ukraine. It has built up its renewable power capacity which has helped, but Norway’s maintenance season is being monitored for any unexpected delays.
  • Intercontinental Exchange reported investment funds’ net long positions in benchmark Dutch futures rose 32% w/w last Friday, highest since before early 2022, according to Bloomberg.
  • Argentina has had to buy from the global gas market as temperatures drop while the full opening of the Nestor Kirchner pipeline has been delayed.
  • US natural gas fell 5.9% to $2.66 but is still up almost 15% in May. The move lower was driven by forecasts for cooler weather in northeastern and central US for June 8 to 12, according to Maxar Technologies.
  • The EIA reports last week’s US gas stocks later today and according to Bloomberg consensus they are expected to rise 77bcf.
  • North Asian prices fell 1.5% on Wednesday to be up 18.8% this month but the resumption of the downtrend is not expected as demand is likely to remain strong in coming months.