Prices Rise As European Deliveries Delayed & US Mulls LNG Export Rules

Natural gas prices were higher across continents on Wednesday, after sinking into oversold territory earlier in the week as soft demand has offset geopolitical tensions. Prices were boosted by buyers taking advantage of low prices and Qatar notifying Europe that LNG shipments have been delayed due to its decision to avoid the Red Sea. European LNG prices rose 6% on Wednesday to be still down over 10% this year. They rose to EUR 28.87, close to the intraday high of EUR 29.17.

• Qatar has rerouted at least 6 vessels headed for Europe around southern Africa, according to Bloomberg. Other contracts are being filled by diverting shipments for other buyers. The gas producer confirmed that its production has not been impacted but the “scheduling of some deliveries” may be delayed. Qatari output over the last 2 weeks is up 7% y/y.
• US natural gas rose 5.6% to be down slightly this month. There are reports that the Biden administration is likely to require increased environmental credentials from LNG exporters which would delay a number of export projects, including the large Venture Global CP2 export terminal, according to Bloomberg. Also, the Energy Department is to review the climate impact of the CP2 project before deciding on whether to approve it. The US is the largest LNG exporter.
• North Asian gas prices rose 2.5% but are still down around 17% in January to date. Low prices have increased interest from buyers in the region.