Gas Prices Lower Last Week, Red Sea Attacks May Support Them

European LNG prices rose 4.3% on Friday to EUR 43.88, close to the intraday high of EUR 44.15, demonstrating that the market remains sensitive to supply developments. Germany’s Uniper noted that Europe needs more gas supply as the market is tight despite high storage levels. LNG was still down sharply on the week though falling 7.6%. Yesterday’s attacks on three commercial shipping vessels in the Red Sea by Houthi rebels may cause some price volatility as a significant share of LNG shipments go through the Suez Canal.

• As December continues, temperatures should rise to around average in much of Europe but the north is likely to remain very cold, according to Bloomberg.
• North Asian prices rose 0.7% but were still down almost 5% on the week as demand remains soft with winter not yet fully arriving.
• US natural gas prices fell another 0.9% to be down 7.4% last week. The EIA reported stronger demand in the latest week due to colder weather but supply continued to rise.