Gas Prices Stronger Last Week As Buyers Attracted By Low Prices

European LNG prices ended the week higher rising 1.8% on Friday to EUR 29.30 and to be up 4.7% on the week. Prices rose to EUR 31.22 on Wednesday. Gas was supported last week by geopolitical tensions in the Middle East and the related delays to LNG shipments, and forecasted colder weather later in February. Low prices have also brought buyers back into the market. But storage levels remain seasonally high, which should weigh on prices.

• US natural gas prices rose 2.1% on Friday but were down almost 4% on the week. They fell to $2.021 but bounced from here with traders reluctant to drive it below $2 despite warmer weather forecast. Cooler weather is expected though towards the end of February.
• There is growing criticism of President Biden’s freeze on LNG gas approvals while their impact on climate change is assessed. The heads of Shell and Exxon plus moderate Democrats have voiced their concern. Republicans are hoping to derail the proposal in the House. The decision is also expected to delay or cancel a number of gas terminal projects.
• The Baker Hughes rig count fell 2 in the latest week to the lowest since mid-January and down 16.7% y/y. Oil was steady with the drop in the gas sector.
• North Asian prices were flat but rose a moderate 1.8% last week.