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LNG: European Prices Rise As Less Wind Drives Higher Gas Demand

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European LNG prices rose 3.4% on Monday to EUR 40.52 as demand rose due to a drop in wind-generated power, which is expected to continue this week. It was also supported by positive sentiment for energy after OPEC delayed its gradual normalisation of oil output. 

  • European storage is high at above 95% full and while imports have been lower for this time of year, they continue to arrive from the US, Qatar and North Africa, according to Italy’s Eni SpA. There are still risks around year-end when an agreement for Russian gas to flow through Ukraine expires but talks are progressing with Azerbaijan as an alternative route.
  • If Iran follows through on its plan of a “strong and complex” strike on Israel, then its oil facilities may become targets. It would also heighten the risk to the Strait of Hormuz and Qatar’s LNG shipments.
  • US natural gas rose 4.7% to $2.79 as October’s sharp fall in prices encouraged buyers into the market.
  • Warmer weather has weighed on prices in the US, but Tropical Storm Rafael has the potential to disrupt oil and gas production in the western Gulf of Mexico, according to Bloomberg. Forecasts for mid-November in western and central US are for lower temperatures, while the east stays above average, according to Commodity Weather Group. 
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European LNG prices rose 3.4% on Monday to EUR 40.52 as demand rose due to a drop in wind-generated power, which is expected to continue this week. It was also supported by positive sentiment for energy after OPEC delayed its gradual normalisation of oil output. 

  • European storage is high at above 95% full and while imports have been lower for this time of year, they continue to arrive from the US, Qatar and North Africa, according to Italy’s Eni SpA. There are still risks around year-end when an agreement for Russian gas to flow through Ukraine expires but talks are progressing with Azerbaijan as an alternative route.
  • If Iran follows through on its plan of a “strong and complex” strike on Israel, then its oil facilities may become targets. It would also heighten the risk to the Strait of Hormuz and Qatar’s LNG shipments.
  • US natural gas rose 4.7% to $2.79 as October’s sharp fall in prices encouraged buyers into the market.
  • Warmer weather has weighed on prices in the US, but Tropical Storm Rafael has the potential to disrupt oil and gas production in the western Gulf of Mexico, according to Bloomberg. Forecasts for mid-November in western and central US are for lower temperatures, while the east stays above average, according to Commodity Weather Group.