Natural gas prices were down on Friday in Europe, Asia and the US, with weather forecasts playing a central role, as autumn in the northern hemisphere continues to be much milder – if windier – than normal.
However, prices diverged on Monday as colder weather was forecast for the US, while in North-West Europe Storm Debi brought temperatures well above the seasonal average, after a brief cold snap over the weekend.
News over the weekend that Israeli had ordered the resumption of natural gas production at the Chevron-operated offshore Tamar field – which was shut in after the Hamas attacks on 7 October – added to downward pressures, with European prices continuing to fall on Monday morning.
In Continental Europe, TTF front-month futures fell by 3.3%, from USD 15.11/MMBtu on Thursday to USD 14.60/MMBtu on Friday.
In the UK, NBP was down 3.9%, from USD 14.98/MMBtu on Thursday to USD 14.40/MMBtu on Friday.
Both TTF and NBP were moving downwards on Monday morning, though on significantly different trajectories, with wind power at a high level in the UK as Storm Debi strengthened.
In Asia, JKM continued weeks of gentle decline, falling by 0.4%, from USD 17.26/MMBtu on Thursday to USD 17.19/MMBtu on Friday. The steeper fall in TTF meant the TTF-JKM spread widened by 20%, from USD 2.15/MMBtu to USD 2.59/MMBtu.
European coal prices were influenced by natural gas prices, with API2 coal down 1.6%, from USD 5.07/MMBtu on Thursday to USD 4.99/MMBtu on Friday.
In the US, Henry Hub edged down by 0.3%, from USD 3.04/MMBtu on Thursday to USD 3.03/MMBtu on Friday, but was up sharply on Monday morning, with colder weather forecast for the second half of November.
Crude oil prices rallied for a second day after recent falls, with Brent up 1.8%, from USD 80.01/barrel on Thursday to USD 81.43/barrel on Friday. WTI was up 1.9% from USD 75.74/barrel to USD 77.17/barrel. Both Brent and WTI were treading water on Monday morning.
OPEC – in its latest monthly report, published on Monday – said crude oil market fundamentals remained healthy “despite exaggerated negative sentiment”.
“As global oil demand continues to demonstrate strength and resilience – with better-than-expected growth in the fourth quarter of 2023, mainly in non-OECD countries – the secretariat’s latest forecast for global oil demand growth for 2023 is revised upwards to reach 2.5 million barrels/day,” it said.
OPEC is particularly scathing about “overblown negative sentiment in the market regarding China’s oil demand”, forecasting that Chinese demand remains on track to reach a new annual record high of 11.4 million barrels/day in 2023.
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.