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LNG: European Market Jitters Persist Despite Elevated Inventories

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European LNG prices fell 0.5% to EUR 42.31 on Tuesday after declining Monday but they are still up 8.4% this month. The November contract rose to a high of EUR 43.62 and then fell to around EUR 42.20. Despite storage levels above 95%, the market remains worried about supply going into 2025 and beyond with Russian flows through Ukraine to stop at end 2024, competition with Asia & Egypt and filling regulations. An outage in Norway also continues.

  • European regulations require that certain storage levels are achieved by autumn and as such they boost natural gas prices through the summer and reduce them over winter, according to Energy Aspects.
  • There is increased demand for gas in Brazil for power generation due to a severe drought.
  • The December contract for US natural gas rose 1.5% on Tuesday to $2.91 but is still down 13.2% in October. It was supported by a mixed weather outlook across the US with above average temperatures in the eastern US but below in the west in the first week of November, according to Commodity Weather Group.
  • North Asian prices fell 0.8%. Shipment to India and Korea remain strong with Korean October imports increased 43% y/y (ANZ).
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European LNG prices fell 0.5% to EUR 42.31 on Tuesday after declining Monday but they are still up 8.4% this month. The November contract rose to a high of EUR 43.62 and then fell to around EUR 42.20. Despite storage levels above 95%, the market remains worried about supply going into 2025 and beyond with Russian flows through Ukraine to stop at end 2024, competition with Asia & Egypt and filling regulations. An outage in Norway also continues.

  • European regulations require that certain storage levels are achieved by autumn and as such they boost natural gas prices through the summer and reduce them over winter, according to Energy Aspects.
  • There is increased demand for gas in Brazil for power generation due to a severe drought.
  • The December contract for US natural gas rose 1.5% on Tuesday to $2.91 but is still down 13.2% in October. It was supported by a mixed weather outlook across the US with above average temperatures in the eastern US but below in the west in the first week of November, according to Commodity Weather Group.
  • North Asian prices fell 0.8%. Shipment to India and Korea remain strong with Korean October imports increased 43% y/y (ANZ).