Gas Prices Jump Again On Supply Disruptions

European LNG prices rose another 12.4% to EUR 49.40 on Tuesday after an intraday high of EUR 49.82, the highest since late August. They are now 29.2% higher than Friday driven by increased geopolitical risks in the Middle East, which have resulted in the shutdown of an Israeli gas field. Also a large amount of LNG is shipped through the Suez Canal. North Asian prices are more muted rising only 0.6%.

• Chevron shut down the Tamar offshore gas field due to fighting in Gaza. It is close enough to northern Gaza to be at risk of rocket fire. But Chevron said that it is re-routing gas exports from the field to Egypt via the Fajr pipeline in Jordan. The other major Israeli field Leviathan remains open. Europe imports gas from Israel through Egypt, and the first LNG shipment since July occurred on Friday, according to Bloomberg shipping data.
• Despite high inventories, Europe remains vulnerable to disruptions to gas imports since Russia’s invasion of Ukraine. The IEA said on Tuesday that tight supply is likely to continue to result in price volatility in the northern hemisphere winter. “The balance we have reached is quite fragile,” according to IEA analyst Molnar.
• A leak was found in a pipeline in the Baltic Sea which provides gas to Finland and Estonia. On Tuesday Finland’s PM Orpo said that it had been caused by “external action” and that a telecoms cable had also been damaged.