Pricewatch l 10 June 2024 I Gas Matters Today

US natural gas prices continued to surge on Friday, with front-month Henry Hub settling a shade short of the psychologically significant USD 3/MMBtu threshold. The price has already broken through that threshold in intra-day trading. Forecasts of sweltering weather later this month appear to be the main driver.

A 3.4% rise took the July contract to USD 2.92/MMBtu, up four-fifths on a low of USD 1.61/MMBtu on 26 April. Month-ahead Henry Hub was last at around these levels in mid-January, when winter demand was at its height. The January 2025 Henry Hub contract is at USD 4/MMBtu.

Price movements in other energy and carbon markets were muted, and mostly downwards, notably for crude oil. Brent edged down 0.3%, from USD 79.87/barrel on Thursday to USD 79.62/barrel on Friday, while WTI plateaued at USD 75.53/barrel.

There remains uncertainty about the strategy of OPEC+ members when it comes to gradually lifting voluntary output curbs from October this year, suggesting that alignment is less robust than it could be.

European natural gas prices fell as exports from Norway recovered. The Nyhamna gas processing plant on Norway’s west coast started to ramp up output after an unplanned outage caused by a ruptured pipeline at the Sleipner Riser platform in the North Sea.

The Gassco website shows available capacity of 45.0 mcm/d for Nyhamna on Friday out of a total of 79.8 mcm/d.

In continental Europe, month-ahead TTF fell by 1.8%, from USD 10.74/MMBtu on Thursday to USD 10.55/MMBtu on Friday. The July contract was on a downward trend in trading on Monday morning.

In the UK, where Norwegian gas has resumed flowing into the Easington terminal on the east coast, the July NBP contract was down 2.5%, from USD 10.28/MMBtu on Thursday to USD 10.03/MMBtu on Friday, and moving further down on Monday. The Gassco website shows a nomination of 59.0 mcm for Easington on Monday.

Gas storage in the European Union continues to build, despite the disruption to Norwegian exports. Data from Gas Infrastructure Europe (GIE) shows a level of 71.6% for last Saturday. The storage level is expected to be well over 90% by the end of October, ahead of the winter heating season.

UK storage is significantly lower at 42.8% and has been fluctuating within a range of 40-50% for most of the first half of 2024, according to GIE data.

In Asia, the JKM LNG benchmark remained stable, edging down 0.1%, from USD 11.99/MMBtu to USD 11.97/MMBtu. The fall in TTF meant the TTF-JKM spread widened to USD 1.42/MMBtu.

European coal maintained its loose correlation with gas. API2 was down 1.7%, from USD 4.39/MMBtu on Thursday to USD 4.32/MMBtu on Friday.

Europe carbon prices closed below EUR 70/tonne for the first time since the middle of May, in the wake of the repairs at Sleipner Riser. EU emissions allowances were down 1.0%, from EUR 70.62/tonne to EUR 69.91/tonne.

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.