Gas Prices Higher On The Week As Bargain Hunters Enter Market

European LNG prices climbed higher on Friday rising 2.8% to EUR 25.55, close to the intraday high, to be up almost 11% over the weak as very low prices have encouraged buyers into the market to replenish stocks as the heating season approaches its end. European storage is at a record for the time of year at 62% full, according to Gas Infrastructure Europe.

• Given the already high storage rates, Europe is looking at alternatives facilities, such as keeping LNG on ships longer before unloading or using storage in the Ukraine, who has the largest capacity in Europe outside Russia.
• The euro area HCOB manufacturing PMI for February was revised slightly higher to 46.5 but continued to show that activity in the sector is contracting. Weak industrial demand has also weighed on European gas consumption. Bloomberg reports that weather in the first half of March is expected to be mild.
• US natural gas prices fell 1.3% on Friday due to forecasts of warmer weather in the central and eastern US but were still around 8% higher on the week. Production cuts and a possible shift lower in temperatures later in the month could support prices in March. Output was 1.4% y/y higher on Friday.
• North Asian prices were up 7.6% last week as China’s demand increased. Imports in February rose 15% y/y to a new record, according to ship tracking data. The largest power producer CNPC expects gas imports to rise 8.2% in 2024.