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LNG: Gas Prices Rise On Supply Uncertainties & The Approach Of Winter

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The prospect of an easing in geopolitical tensions in the Middle East did not weigh on gas prices as it did on oil. European LNG rose 1.9% to EUR 47.91 after a high of EUR 48.91, just below November’s high of EUR 49.55 on the 22nd. It is now up 18% this month. Forecasts for colder weather towards the end of the week and supply uncertainty drove prices higher.

  • European storage remains around 88% full, according to Bloomberg, withdrawals have been at a faster pace than normal due to colder weather and low wind conditions impacting power generation. This adds to risks for later in the winter and also summer restocking. HSBC expects season-end storage to be at 42% below 2023’s 59%.
  • There was an unplanned outage at Woodside’s Australian Pluto LNG plant which has resulted in a halt to production, this also boosted North Asian prices.
  • The market also remains nervous going into year end with Russian gas transiting through Ukraine scheduled to stop, plus the impact of the escalation in the conflict on energy infrastructure.
  • US natural gas jumped 6.3% to $3.33 to be up 23% in November driven by forecasts for colder weather going into December across the southern and middle of the country after a mild autumn, according to Atmospheric G2.
  • US lower-48 gas output fell 0.4% y/y on Monday, while demand was down 10.7% y/y. Heating demand is likely to pick up with the turn down in temperatures.
  • The Trump-administration is looking to end the pause in LNG export licences under Biden as soon as possible.
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The prospect of an easing in geopolitical tensions in the Middle East did not weigh on gas prices as it did on oil. European LNG rose 1.9% to EUR 47.91 after a high of EUR 48.91, just below November’s high of EUR 49.55 on the 22nd. It is now up 18% this month. Forecasts for colder weather towards the end of the week and supply uncertainty drove prices higher.

  • European storage remains around 88% full, according to Bloomberg, withdrawals have been at a faster pace than normal due to colder weather and low wind conditions impacting power generation. This adds to risks for later in the winter and also summer restocking. HSBC expects season-end storage to be at 42% below 2023’s 59%.
  • There was an unplanned outage at Woodside’s Australian Pluto LNG plant which has resulted in a halt to production, this also boosted North Asian prices.
  • The market also remains nervous going into year end with Russian gas transiting through Ukraine scheduled to stop, plus the impact of the escalation in the conflict on energy infrastructure.
  • US natural gas jumped 6.3% to $3.33 to be up 23% in November driven by forecasts for colder weather going into December across the southern and middle of the country after a mild autumn, according to Atmospheric G2.
  • US lower-48 gas output fell 0.4% y/y on Monday, while demand was down 10.7% y/y. Heating demand is likely to pick up with the turn down in temperatures.
  • The Trump-administration is looking to end the pause in LNG export licences under Biden as soon as possible.