Monday’s Widespread Attack On Ukraine Makes Markets Nervous

European LNG prices rose 2.4% on Monday to EUR 37.75, close to the intraday high of EUR 37.92. They are now up over 5% this month. The rally was driven by Russia’s widespread attack on Ukraine yesterday which particularly targeted energy infrastructure. Russia said it had struck gas-compressor facilities in western Ukraine.

• Data from Slovakia’s gas transmission operator Eustream indicated that flows through Ukraine had not been disrupted by Russia’s actions, Bloomberg noted. European storage at 91% full is two months ahead of schedule, according to Gas Infrastructure Europe, but markets remain sensitive to supply disruptions especially heading into the heating season.
• The US added sanctions to Russia’s shadow fleet of vessels and on Monday Bloomberg reported that a tanker was transferring its Russian LNG to another ship off the coast of Egypt to avoid penalties.
• US natural gas fell again as excess supply continues to weigh on prices. They were down 2.7% to $1.97 having fallen below $2 early in the session. While weather is expected to be warmer this week, it is forecast to be cooler in September as autumn begins.
• North Asian prices were steady to be up 8.5% in August to date. Hot weather is again boosting demand.