Gas Prices Keep Trending Lower As Demand Soft And Stocks High

European LNG prices continued to trend lower on Monday falling 4.9% to EUR 25.79 to be down almost 15% in February to date as storage levels remain above the seasonal average. Demand is also soft compared to the past. Temperatures are expected to be above average in most of the region over the rest of February (Maxar Technologies).

• Citigroup analysts said that European demand in January was 32% below the 5-year average to 2021 and the UK 15% lower.
• Bloomberg is reporting that volatility in European gas options has fallen to levels not seen since before Russia invaded Ukraine, which implies that traders are no longer concerned about winter supplies and are now looking out to restocking over spring/summer.
• US natural gas prices continued to fall further below $2 on Monday. They were down 5.1% to $1.75 and are now 16.5% lower on the month. Monday’s weakness was driven by warmer weather forecasts for the Midwest and central part of the country.
• North Asian gas prices continue to move sideways with most of the region on holiday.