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LNG: Threats To European Supply Drive Prices Higher

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European natural gas prices rose 1.3% to EUR 47.15 to be up 16.2% in November, as concerns over Russian flows to Europe grow with the announcement of Ukraine being able to use US missiles to target some sites in Russia, which may threaten its gas infrastructure. The market is also worried about the expiry at the end of 2024 of the deal to allow Russian gas to flow through Ukraine, while flows have been cut off to Austria because of a dispute.

  • European industrial demand is likely to remain soft with the sector continuing to struggle but northwest Europe is forecast to face a cold snap increasing heating consumption. Austria may now drawdown from inventories.
  • Russia’s Gazprom continues to supply other European countries, including Slovakia, and flows through Ukraine remain at usual levels.
  • Morgan Stanley revised up its forecast for Q1 2025 benchmark Dutch gas prices by 8% due to the increase in market tightness, according to Bloomberg.
  • US natural gas rose 4.2% to $2.94 to be 8.6% higher this month driven by expectations for cooler weather across much of the US at the end of November and into December, according to Atmospheric G2.
  • North Asian prices followed Europe higher as the two regions compete for global supplies. China’s import volumes in October rose 28% y/y. 
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European natural gas prices rose 1.3% to EUR 47.15 to be up 16.2% in November, as concerns over Russian flows to Europe grow with the announcement of Ukraine being able to use US missiles to target some sites in Russia, which may threaten its gas infrastructure. The market is also worried about the expiry at the end of 2024 of the deal to allow Russian gas to flow through Ukraine, while flows have been cut off to Austria because of a dispute.

  • European industrial demand is likely to remain soft with the sector continuing to struggle but northwest Europe is forecast to face a cold snap increasing heating consumption. Austria may now drawdown from inventories.
  • Russia’s Gazprom continues to supply other European countries, including Slovakia, and flows through Ukraine remain at usual levels.
  • Morgan Stanley revised up its forecast for Q1 2025 benchmark Dutch gas prices by 8% due to the increase in market tightness, according to Bloomberg.
  • US natural gas rose 4.2% to $2.94 to be 8.6% higher this month driven by expectations for cooler weather across much of the US at the end of November and into December, according to Atmospheric G2.
  • North Asian prices followed Europe higher as the two regions compete for global supplies. China’s import volumes in October rose 28% y/y.