Gas Prices To Continue Struggling As Spring Approaches

European LNG prices were little changed in trading on Tuesday but are still down around 6% this month. Disruptions to Norwegian flows continued due to an outage at the Troll field. Prices trended higher over the day to a high of EUR 29.20 before moderating to close at EUR 28.37.

• The price difference between Europe and Asia has narrowed over winter. Winter demand is expected to ease now as spring approaches, a time of seasonally lower usage. LNG imports above the 5-year average into Europe over winter have resulted in storage at around 69%.
• Citigroup expects gas prices to trend lower into the start of Q2.
• US natural gas prices fell 4% and tested the key $2 level falling to a low of $1.997. They are now down almost 5% this month. LNG exports fell in January due to outages from a cold snap.
• North Asian prices rose 0.2% to be down around 0.5% in February to date. Demand is expected to remain soft in the region with struggling growth in China, although stimulus may provide a boost, and a downtrend in Japanese energy demand.