Mid-Day Gas Summary: TTF Eases Back

TTF front month has reversed earlier gains and eased back into negative territory but prices are failing to find a clear direction as supply reductions due to Norwegian maintenance and LNG supply risks are balanced against low European demand and healthy natural gas storage levels.

• TTF OCT 23 down -2% at 33.75€/MWh
• NBP OCT 23 down -1.4% at 82.32p/th
• JKM Oct 23 down -2.5% at 12.91$/mmbtu
• Chevron and the unions are holding a final round of talks on Wednesday ahead of the planned strike action at the Gorgon and Wheatstone LNG facilities in Australia which is scheduled to begin on Thursday morning according to Reuters. Chevron said on Tuesday the firm has continuity plans for potential disruptions to LNG supplies in place. Workers at Chevron’s facilities could extend strikes with 24-hour stoppages from 14 Sep after strikes of up to 11 hours per day from 7-13 Sep.
• Norwegian pipeline supplies to Europe are relatively unchanged from yesterday at 136.8mcm/d today. But extensions to maintenance at the large Troll field and Kollsnes gas facility will further reduce flows on Thursday.
• European natural gas storage continues to edge higher up to 93.34% full on a 4 Sep according to GIE data compared to the five year average for this time of year of 81.9%. Injection rates are relatively slow as gas in store levels approach full capacity.
• Norwegian hydropower reserves declined for the first time since early May last week to 78.7% of capacity as of 5 September, down by 0.6 percentage points on the week, NVE data showed.
• LNG sendout to Europe remains relatively unchanged this week at about 346mcm/d on 4 Sep but is still below levels from last year due to high gas storage and low European demand.
• Global LNG prices have decreased significantly but are still high on a historical basis, which is resulting in demand destruction, particularly in Asia, an executive from Shell said.
• US LNG exports are more profitable to Asia in October and December, while Europe is the best netback in November, according to BNEF.