17
Aug
2022

Pricewatch | 17 Aug 2022 | Gas Matters Today

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Gas prices on both sides of the Atlantic recorded strong gains on Tuesday, with European hubs TTF and NBP hitting fresh five-month highs.

The Dutch and UK gas benchmarks continued to climb on Tuesday amid lingering winter supply fears. TTF settled 2.5% higher at USD 67.36/MMBtu, with NBP up 4.7% to close at USD 53.48/MMBtu.

In a Telegram post on Tuesday, Gazprom – which has throttled Nord Stream 1 flows in recent months – said that “according to conservative estimates” winter gas prices will “exceed” USD 4,000/Mcm (~USD 110/MMBtu).

Gas storage levels in Europe were 75% full as of 15 August, according to GIE data. There are 44 days until the start of the winter heating season on 1 October, and 75 days until 1 November – the date the EU has set to have storage sites 80% full.

Strong gas prices in Europe are helping lift carbon and power prices. The European carbon price hit a fresh six-month high on Monday, closing at EUR 91.68/tonne.

Across the pond, US gas benchmark Henry Hub returned to the USD 9/MMBtu range for the first time since 7 June – a day before the fire at the Freeport LNG facility, which led to Henry Hub dipping.

The rally was pinned on falling production amid maintenance activity across shale plays in the north-east of the country.

As for JKM, the September-dated contract remained unchanged ahead of the contract’s settlement on Wednesday. However, the October and November contracts rallied, with the former up ~USD 0.5/MMBtu to close at ~USD 56.7/MMBtu and the November contract up ~USD 2.4/MMBtu, settling at ~USD 59.2/MMBtu.

Crude prices slumped to a six-month low amid heightened fears of a global recession. Brent and WTI fell by ~3%, with the international marker settling at USD 92.34/barrel and the US benchmark closing at USD 86.53/barrel.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge):

Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.

Contact the editor:

Eric Thorp
[email protected]

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