Gas Prices Keep Climbing

European LNG continued rising with prices up 1.5% to EUR 27.30 after a peak of EUR 28.73 early in the session. They are already almost 10% higher this month as low prices are encouraging market participants to look at replenishing stocks and Europe looks at ways to reduce Russian gas consumption.

• Gas is finding support in Europe because the low level of prices makes it competitive at a time coal prices are rising.
• LNG stored on seaborne vessels rose well above the seasonal average this week to wait for demand to rise, according to Bloomberg data.
• The deal to allow Russian gas to flow through Ukraine to Europe expires at the end of the year. Both have said it won’t be renegotiated and Ukraine’s energy minister has said that commercial deals won’t be possible. Spain also wants to be able to block Russian shipments without them being rerouted through neighbouring countries.
• US natural gas prices rose 1.7% to $1.95 on Wednesday to be up 4.7% in March to date driven by production cuts and increased activity from the low level of prices. Prices briefly rose above $2. Temperatures are expected to rise into mid-March.
• North Asian gas prices also rose yesterday and are now up 8% this month as low prices encourage purchases. Some vessels are now being rerouted to Asia and away from Europe due to high inventories there.