Gas Prices Soft On Solid Inventories, US Prices Higher Following Biden Decision

European LNG prices fell 2.9% to EUR 31.73, close to the intraday low, on Friday. They were little changed on the week to be down 8% in July to date as elevated inventory levels offset supply concerns.

• Delays to the full operation of Texas’ Freeport LNG export facility have not weighed on European markets materially. The first tanker docked at Freeport over the weekend since July 5, according to Bloomberg. The plant was damaged by Hurricane Beryl on July 8 and output was wound down ahead of its arrival, at least 10 LNG shipments have been cancelled.
• US natural gas prices were little changed on Friday at around $2.12 to be down 18.3% this month. They fell to a low of $2.06 earlier in the session. They are 1.3% higher at $2.16 in today’s trading though following President Biden’s decision not to run in the November election and to endorse VP Harris as the Democratic candidate.
• Biden paused the approval of new permits for LNG export facilities, a decision recently overturned by the courts. Given Harris is seen as further to the left on environmental issues, the gas sector may again face threats if she becomes President.
• US lower-48 gas production on Friday rose 1% y/y with demand down 1.5% y/y. Excess supply has been weighing on Henry Hub prices.
• North Asian gas prices fell 1.1% on Friday to be down around 2% in July. Cooling demand has kept gas purchases solid though, providing competition with Europe for cargoes.