Pricewatch l 19 May 2023 I Gas Matters Today

European prices plunged on Thursday on continuing bearish fundamentals determined by strong stocks, mild weather and stronger renewable power generation.

The market is finding a lower limit after a seven-week streak of declines, the longest in six years driven by stable supply, mild weather and stronger renewable generation.

NBP saw a 7.5% plunge to USD 8.42/MMBtu, breaking yet another multi-year record, falling to its lowest since May 2021.

Meanwhile, TTF lost 7.2% and settled at USD 9.41/MMBtu, falling below the USD 10/MMBtu mark for the first time since June 2021.

WindEurope reported that Thursday’s wind generation rose to 20.7% of total electricity generation, and Gas Infrastructure Europe (GIE) revealed that gas storages on the continent were almost 65% full as of 17 May.

Meanwhile, JKM saw it’s biggest dip in a month as the front-month contract fell 12.1% to USD 9.72/MMBtu. The LNG marker have been plummeting as a mild northern hemisphere winter left utilities with ample stockpiles – a complete reversal from last year’s energy shortage that triggered a record-breaking rally.

In the US, Henry Hub climbed sharply on Thursday, up 10% to USD 2.59/MMBtu, as the US Energy Information Administration (EIA) reported a smaller-than-expected weekly rise in domestic natural-gas supplies.

Inventories rose by 99 Bcf for the week ended 12 May against analysts’ forecast of a 106-110 Bcf injection.

Crude reversed the growing price trend by seeing declines, as the US reported solid economic data, which spurred the dollar to reach a two-month high. Brent settled at USD75.86/barrel and WTI was at USD 71.86/barrel.

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.