Gas Prices Rally Driven By Outages & Increased Geopolitical Risks

European LNG prices rose strongly on Monday up 7.8% to EUR 29.10, highest since early February, and up 17% in March to date. While storage levels remain well above the seasonal average, disruptions and risks to supplies are driving prices higher. Cooler weather across northern Europe is forecast for next week.

• Ukrainian attacks on Russian energy infrastructure have added a risk premium to LNG, as Russia is a major exporter. In addition, EU members will soon be able to block Russian and Belarusian exporters from reserving gas infrastructure as the EU attempts to reduce imports of Russian LNG.
• Norway has also reported unplanned outages and flows from Australia’s northwest fields have been impacted by tropical storms.
• US natural gas prices rose 3.6% to $1.72 to still be down 7.8% on the month. Exports from the Freeport facility have been impacted by a production line going down, which impacts European supplies. Forecasts are also pointing to cooler weather towards the end of March for the East Coast and Midwest.
• North Asian gas prices were up 5.3% on Monday to be up 16.1% in March boosted by outages in numerous countries and low prices encouraging buyers into the market.