Natural gas futures in the US and Europe continued to fall on Friday as mild weather prevailed – with the story of the 2023/24 heating season turning out to be “the winter the never was”.
While both regions have seen the occasional cold snap, weather has been milder than seasonal norms for much of the autumn and winter, affecting the volumes of gas needed to meet heating demand and keeping inventories high.
Meanwhile supplies for the most part have remained robust, despite the occasional production outage, the war in Gaza and Houthi attacks on Red Sea shipping.
With the end of meteorological winter just over a fortnight away, the likelihood of a prolonged cold spell continues to diminish.
US front-month gas has fallen by almost half since it reached USD 3.31/MMBtu in mid-January. On Friday it closed at USD 1.85/MMBtu, down another 3.7% from Thursday’s close of USD 1.92/MMBtu. That is the lowest close since the height of the Covid-19 pandemic in September 2020.
In continental Europe, TTF fell by 2.4%, from USD 8.78/MMBtu on Thursday to USD 8.57/MMBtu on Friday, its lowest close since July last year.
In the UK, NBP moved in tandem, down 2.8%, from USD 8.62/MMBtu to USD 8.39/MMBtu, also the lowest close since July.
Both TTF and NBP had fallen further on Monday by late morning in London.
In Asia, the JKM LNG price continued its run of stability, edging down 0.2%, from USD 9.45/MMBtu on Thursday to USD 9.44/MMBtu on Friday.
Crude oil prices continued their rally, with Brent up 0.7%, from USD 81.63/barrel on Thursday to USD 82.19/barrel on Friday and WTI up 0.8%, from USD 76.22/barrel to USD 76.84/barrel.
The crude rally of the past week comes amid fading hopes of a ceasefire agreement in Gaza and US air strikes in Syria and Iraq. Both prices were down on Monday by around 1.25% by late morning in London.
Low gas prices in Europe are impacting the prices for coal and for carbon emissions as increasingly competitive gas makes inroads into coal’s market.
The API2 coal price was down 1.4%, from USD 3.90/MMBtu on Thursday to USD 3.84/MMBtu on Friday.
Carbon prices continued their downward trajectory, falling 3.3%, from EUR 58.97/tonne on Thursday to EUR 57.03/tonne on Friday.
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.