Gas Prices Rise Further But Fundamentals Suggest Upside Limited

European LNG prices rose for a fifth straight day up 1.1% on Tuesday to EUR 29.15/MWh after approaching EUR 30 early in the session. They are now up 17.2% in March to date as supply disruptions and low prices attracting buyers have pushed prices higher. But it may now be approaching overbought levels and fundamentals are not supportive of further gains with inventories high and summer approaching.

• Exports from the Freeport facility have been impacted by a production line going down, which affects European supplies. But LNG production will be increased 10% after repairs and maintenance are complete to around 16.5mn metric tonnes per year, which will go into exports.
• Ukrainian attacks on Russian energy infrastructure have also made the gas market nervous.
• US natural gas prices rose 3% to $1.75 on the back of forecasts for cooler weather in the East and Midwest at the end of March. They are still down 6% on the month.
• North Asian prices rose moderately on Wednesday to be up over 16% in March as low prices have increased demand.