23
Jul
2021

Pricewatch | 23 Jul 2021 | Gas Matters Today

Only Subscribers can read the full Article

Oil prices have recovered fully from Monday’s crash after a third consecutive day of gains on Thursday.

The front-month WTI and Brent contracts erased all the losses the benchmarks recorded on Monday. Both crude markers rallied by over 2% yesterday, with WTI settling at USD 71.91/barrel and Brent hitting USD 73.79/barrel.

The rally was pinned on expectations of a tight supply outlook over the remainder of the year as some market participants expect demand growth to outstrip new supply – despite OPEC+ agreeing to add 400,000 barrels/d back to the market each month from August through to the end of the year.

Prices tumbled on Monday after OPEC+ announced the new production quota on Sunday, with concerns over rising Covid-19 cases also weighing on prices. However there is optimism that demand will remain strong amid rising vaccination rates and continued draws on oil storage in key consuming markets.

As for gas, US gas benchmark Henry Hub hit its highest close since December 2018. The front-month contract rallied by 1.1% to close at USD 4/MMBtu. Henry Hub has been rallying amid forecasts for warmer weather over the remainder of July, which is expected to drive gas demand for air conditioning, and subsequently reduce the availability of gas for injection into US storage sites.

In Europe, prices were mixed. The month-ahead TTF contract continued to climb, rallying by 0.5% in EUR/MWh terms and 0.3% in USD/MMBtu terms. As for UK benchmark NBP, the front-month contract remained unchanged in GBP/th terms but posted a 0.4% gain in USD/MMBtu terms.

European gas prices have been pushed higher by a multitude of factors, including strong gas prices in Asia, low gas storage levels, warm weather and supply tightness.

In Asia, LNG marker JKM recorded a minor loss to settle at USD 14.28/MMBtu.

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]

Subscription Benefits

Our three titles – LNG Business Review, Gas Matters and Gas Matters Today – tackle the biggest questions on global developments and major industry trends through a mixture of news, profiles and analysis.

LNG Business Review

LNG Business Review seeks to discover new truths about today’s LNG industry. It strives to widen market players’ scope of reference by actively engaging with events, offering new perspectives while challenging existing ones, and never shying away from being a platform for debate.

Gas Matters

Gas Matters digs deep into the stories of today, keeping the challenges of tomorrow in its sights. Weekly features and interviews, informed by unrivalled in-house expertise, offer a fresh perspective on events as well as thoughtful, intelligent analysis that dares to challenge the status quo.

Gas Matters Today

Gas Matters Today cuts through the bluster of online news and views to offer trustworthy, informed perspectives on major events shaping the gas and LNG industries. This daily news service provides unparalleled insight by drawing on the collective knowledge of in-house reporters, specialist contributors and extensive archive to go beyond the headlines, making it essential reading for gas industry professionals.

Did you know that your Internet Explorer Browser is out of date?

Your MS Internet Explorer browser is out of date, and will not be fully compatible with our website. For best browsing experience we recommend that you upgrade your IE browser to a more recent version or use an alternative, more recent browser.