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Market Takes A Breather After Rising Strongly

LNG
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Gas prices eased on Friday as the market re-evaluated after climbing through the week. European LNG fell 3.6% but is up 16.7% in May. It fell to a low of EUR 33.49 but finished around EUR 33.97.

  • The recent rally also paused as supply and inventories are robust. Although there are some disruptions with unplanned maintenance at Norway’s Kollsnes facility extended, Austria warning that flows from Russia may be cease following a court decision, Australia’s Gorgon facility still impacted by a train outage and Brunei LNG trying to restart a plant shut last week.
  • Preliminary May manufacturing PMIs for the euro area showed that activity continued to contract but at a slower rate than in April. Weak industrial demand has weighed on prices.
  • US natural gas fell 5.8% to $2.50 but is up 25.7% this month. Forecasts for cooler weather in the north east and increased output to a 2 month high from the Appalachian basin (+1.8% w/w) pressured prices. Lower-48 production was up 0.2% y/y on Friday while demand rose 4.5% y/y. Estimated flows to export terminals fell 3.3% on the week.
  • North Asian gas fell 2.2% on Friday but is still up almost 20% in May. Purchasing has been boosted by cooling demand including in India, which is usually a smaller gas consumer.
  • See MNI Gas Market Weekly.
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Gas prices eased on Friday as the market re-evaluated after climbing through the week. European LNG fell 3.6% but is up 16.7% in May. It fell to a low of EUR 33.49 but finished around EUR 33.97.

  • The recent rally also paused as supply and inventories are robust. Although there are some disruptions with unplanned maintenance at Norway’s Kollsnes facility extended, Austria warning that flows from Russia may be cease following a court decision, Australia’s Gorgon facility still impacted by a train outage and Brunei LNG trying to restart a plant shut last week.
  • Preliminary May manufacturing PMIs for the euro area showed that activity continued to contract but at a slower rate than in April. Weak industrial demand has weighed on prices.
  • US natural gas fell 5.8% to $2.50 but is up 25.7% this month. Forecasts for cooler weather in the north east and increased output to a 2 month high from the Appalachian basin (+1.8% w/w) pressured prices. Lower-48 production was up 0.2% y/y on Friday while demand rose 4.5% y/y. Estimated flows to export terminals fell 3.3% on the week.
  • North Asian gas fell 2.2% on Friday but is still up almost 20% in May. Purchasing has been boosted by cooling demand including in India, which is usually a smaller gas consumer.
  • See MNI Gas Market Weekly.