Gas Prices Lower In July As Demand Softens While Storage Remains High

Global natural gas prices were lower on Tuesday with Europe down 3.7% to EUR 31.10, close to the intraday low of EUR 30.91 and now almost 10% lower in July to date. Expectations of lower cooling demand as extreme heat in Asia dissipates put downward pressure on European prices, as the two regions compete for global supplies.

• Northern Europe has had a mild summer and with industrial demand remaining weak, gas inventories are elevated. While southern Europe has had warmer weather, RBC Capital is reporting that gas demand in Portugal and Spain fell 14% y/y in Q2.
• US natural gas fell 0.6% yesterday to $2.35 after spiking to $2.45 before Fed Chair Powell’s testimony. It is now down 9.6% this month. Prices shifted lower due to further forecasts of cooler weather for parts of the US.
• There was little impact from Hurricane Beryl to US facilities with ports already beginning to reopen. But the Freeport liquefaction facility continues to have reduced output as it not only reduced activity ahead of Beryl but is now impacted by power outages. Corpus Christi LNG, 250miles south of Freeport, was not affected, according to Bloomberg.
• North Asian prices fell 3.1% on Tuesday to be down 8.3% in July. Japan’s heatwave is expected to pass by mid-month reducing its LNG usage. Bloomberg is saying that increased hydroelectricity in China and soft industrial production is likely to reduce demand there and PetroChina bought LNG for mid-August delivery at a discount.