LNG: Prices Down Sharply, Technical Selling Exacerbates Impact From High Invent

European LNG prices fell sharply in line with a general sell off in energy and other commodities. The decline was exacerbated by algorithmic selling. Demand is soft due to weak industrial activity and the bridging season between cooling and heating, while storage levels are elevated ahead of winter. They fell 4.7% to EUR 35.59 after a trough of EUR 34.87, lowest since late July, to be down over 10% this month. 

• US natural gas prices rose 3% to $2.24 to be up around 5% in September as the eastern US is forecast by Maxar to warm up over the coming two weeks.
• Francine strengthened to a hurricane before it makes landfall later today. Flows to the Freeport LNG export terminal in Texas decreased on Tuesday in preparation. It is currently forecast to avoid LNG export facilities along the US Gulf coast.
• North Asian gas fell 4.2% to be down 10.6% this month following European markets. Demand in the region remains robust though and China’s natural gas import volumes rose 8.3% y/y in August, whereas crude imports fell 7% y/y.