Gas Prices Supported On Increased Competition For Supplies

European LNG fell 2.7% on Friday but was still 4% higher on the week as Asian and Egyptian demand for supplies increase for cooling needs. It rose to an intraday high of EUR 31.84 before falling to EUR 30.07. Markets remain wary of disruptions as European storage is refilled ahead of next winter. Geopolitical tensions are a concern as a Gaza truce remains elusive and Norway is about to head into its maintenance season.

• US natural gas prices rose 5.7% to $2.15 to be almost 12% higher on the week. They are currently up slightly at $2.17. Cheniere Energy’s announcement that it doesn’t expect long maintenance outages over the summer pushed prices higher, as it will mean increased exports tightening the domestic market. US production on Friday was down 1.1% y/y but demand was -9.3% y/y.
• US LNG exports were 18.7% lower in April than March due to outages, especially at Freeport (second largest export facility) but there were also 24 hour disruptions at the largest Cheniere Energy. But exports were still 3.7% y/y higher YTD. Shipments to Europe fell 25% m/m but they still accounted for 52.5% of US exports, according to Bloomberg. Asia was worth 32.6%.
• North Asian gas rose 1% to be up 4.7% last week as demand rises as temperatures increase.
• Australia’s Gorgon facility on the North West Shelf has a partial outage due to a fault impacting a production train. Repairs are due to take several weeks.