As the June solstice approaches – marking the start of astronomical summer in the northern hemisphere – over 70 million people in the United States are under extreme weather alerts as temperatures and humidity levels climb. The moment of solstice is at 20.50 Coordinated Universal Time (UTC) tomorrow.
Warnings of scorching temperatures to come have this month briefly pushed US natural gas prices above USD 3/MMBtu but several days of decline have seen prices fall dramatically in recent days.
That decline ended abruptly yesterday as the July Henry Hub contract jumped by 4.3% to settle at USD 2.91/MMBtu as what forecasters described as a “heat dome” settled over the US – marking the first significant heat wave of the season.
The rise comes despite growing natural gas output in the Lower 48 states, with air-conditioning loads expected to soar.
Natural gas prices were also up in Europe and Asia.
In continental Europe, the July TTF contract climbed by 1.4%, from USD 10.77/MMBtu on Monday to USD 10.92/MMBtu on Tuesday. Price movement on Wednesday morning was horizontal but volatile.
In the UK, the July NBP contract was up 0.5%, from USD 10.28/MMBtu to USD 10.33/MMBtu and moving in tandem with TTF on Wednesday morning.
Ahead of the forthcoming UK general election on 4 July, the Conservative government today welcomed news that inflation is back to the 2% target. That said, the Bank of England is expected to maintain the base interest rate at the current level of 5.25% when the Monetary Policy Committee meets tomorrow.
The Labour Party appears to be headed for a landslide victory on a scale not seen for many decades, according to the latest polls, with just over a fortnight of campaigning to go.
In Asia, the JKM LNG benchmark has stabilised after the month-ahead price jumped with the expiry of the July contract on Friday. The price of the August contract edged up 0.2% to USD 12.60/MMBtu, the highest front-month close of 2024.
The sharp jump in JKM prices has seen the TTF-JKM spread move sharply upwards. It reached USD 1.81/MMBtu on Monday but narrowed to USD 1.68/MMBtu yesterday as TTF climbed.
Crude oil prices continued their rally yesterday, with Brent up another 1.3% to USD 85.33/barrel, the highest front-month close since April, and WTI up 1.5% to USD 81.57/barrel, also the highest front-month close since April.
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.
Got a question or comment about this story or other energy matters? Drop our editor, Penny Sukhraj, a line [email protected]
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