Gas Prices Softer But Vulnerable To Geopolitical Developments

European LNG prices started Friday above EUR 33.50 but then trended lower throughout the session to EUR 30.70 to be down 5% on the day but still up 12.3% in April to date. Like with oil, LNG sold off when Israel’s retaliation to Iran’s attack was muted and seen more as a warning shot. Europe remains vulnerable to geopolitical developments though with increased Russian/Ukrainian attacks on each other’s energy infrastructure and a small but possible risk that Iran closes the Strait of Hormuz.

• US natural gas prices rose 0.2% to be up 0.1% this month. High inventories with subdued demand have resulted in excess supply and output cuts. On Friday production was down 0.7% y/y while demand was 4% y/y higher.
• North Asian prices fell 4% but are still 11.4% higher in April. There has been increased activity in the market this month as power providers prepare for a hot summer.