Pricewatch | 17 May 2022 | Gas Matters Today

European natural gas prices diverged on Monday, with Dutch marker TTF settling at a three-month low amid reports suggesting the European Commission has issued guidance on how companies can pay for Russian gas supplies.

The front-month TTF contract closed 4.1% lower at the equivalent of USD 28.36/MMBtu on Monday – the marker’s lowest close since 25 February. As for UK benchmark NBP, it closed 16.3% higher at the equivalent of USD 21.14/MMBtu, with the rally helping close the gap on TTF.

The EC reportedly issued guidance on how European gas buyers can pay for Russian gas supplies without breaching EU sanctions, with the move pushing TTF lower. Engie and RWE both confirmed this week that they have reached an agreement with Gazprom on paying for gas supplies.

In the UK, NBP has been pushed higher by an uptick in gas pipeline exports to continental Europe, with lower LNG imports also helping lift prices.

Across the pond, US gas benchmark Henry Hub staged a recovery and neared the USD 8/MMBtu mark after closing 3.8% higher on Monday.

As for Asian LNG marker JKM, the front-month contract remained unchanged on Monday.

Crude prices continued to climb, with the Brent-WTI spread reduced to just USD 0.04/barrel on Monday. Record gasoline prices in the US has helped lift WTI in recent days, with Brent lifted by hopes of stronger crude demand in China as the world’s largest oil consumer starts to lift Covid lockdown restrictions.

Brent settled 2.4% higher at USD 114.24/barrel, with WTI settling at USD 114.2/barrel, up 3.4% day-on-day.

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.