Gas Prices Rise On Cold Snap And Middle East Tensions

European gas prices rose 44.6% last week as the situation in Israel/Gaza deteriorated and Iran voiced its support for Hamas and Hezbollah, and weather turned wintry in Europe. The foreign minister said that “the hands of all parties in the region are on the trigger” if Israel doesn’t stand down. LNG closed on Friday at EUR 55.28, close to the intraday high of EUR 56.10, the highest since 22 August. It rallied from a low of EUR 50.75 through the afternoon session.

• Chevron shut down the Tamar offshore gas field due to fighting in Gaza. It is close enough to northern Gaza to be at risk of rocket fire. The other major Israeli field Leviathan remains open and may increase output. The market is also jittery about the proximity of the Suez Canal to the troubles, a significant share of Europe’s supplies are shipped through the passage. The market is watching shipments from Egypt.
• Workers at Chevron’s Australian facilities on the North West Shelf have voted to begin industrial action on October 19. Negotiations continue to complete an agreement made last month. North Asian gas prices rose a more subdued 2.8% on the week.