Prices Rise On Easing Supply Risks In Middle East

European LNG prices trended down and fell 10% to EUR 48.61 on Monday to be up 16.1% in October to date. They are now down to levels seen last Thursday, as concern in the market eased driven by US efforts to ensure the conflict in Israel doesn’t spread. Secretary of State Blinken spoke to leaders in the region including Saudi Arabia and has returned to Israel. There has also been unofficial communication between the US and Iran.

• The reduction in risks in the Middle East has eased concerns regarding further output outages in Israel and risks to the Suez Canal, a major passage for LNG shipments.
• The current cold snap in Europe is expected to be brief and that also weighed on prices on Monday. Also, output from Norway is recovering from prolonged outages and storage levels in Europe remain very high.
• However, Australian unions have voted to strike from Thursday at Chevron’s facilities in the North West Shelf which could disrupt exports to Asia if the action is protracted. North Asian prices rose sharply on Monday.