European natural gas futures resumed their rallies on Friday, ahead of the start of meteorological autumn in northern hemisphere on Sunday, and are once again close to their 2024 highs, reached in August.
In continental Europe, the October TTF contract – which became the front month on Friday – closed up 2.9% on the expiration price of the September contract on Thursday, at USD 12.89/MMBtu.
The month-ahead price has risen in four of the last six trading sessions and is now only a whisker short of the highest month-ahead price in 2024 of USD 12.94/MMBtu, on 19 August. In local currency, the highest month-ahead price this year was on 9 August, at EUR 40.40/MWh.
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In the UK, the October NBP contract closed up 4.5% on the expiration price of the September contract on Thursday, at USD 12.62/MMBtu. It, too, is close to its 2024 high.
The rises come despite high levels of storage and one bullish factor is a reduction in Norwegian exports because of planned maintenance. Others include uncertainty over Russian pipeline flows through Ukraine and various geopolitical risks, especially in the Middle East.
In Asia, the JKM LNG benchmark edged up 0.6% to USD 14.09/MMBtu, with the TTF-JKM spread narrowing to USD 1.20/MMBtu. As with European prices, JKM reached its 2024 high of USD 14.52/MMBtu last month, in the aftermath of Ukraine’s incursion into southern Russia in the first week of August.
In the US, the October Henry Hub contract edged down 0.5%, from USD 2.14/MMBtu to USD 2.13/MMBtu, amid expectations that the onset of autumn will bring cooler weather.
Producers will take comfort from the fact that prices remain above the USD 2/MMBtu threshold and should rise as the winter heating season approaches. The December Henry Hub contract is currently just above USD 3/MMBtu.
Crude oil prices fell as demand concerns persisted, especially in China. From a supply, perspective, the current weakness in oil prices is explained by growing expectations that OPEC+ members will begin reversing output curbs from the start of next month.
The September Brent futures contract was down 1.4% on Friday, from USD 79.94/barrel to USD 78.80/barrel, while WTI fell by 3.1%, from USD 75.91/barrel to USD 73.55/barrel.
The October Brent contract, now the front month, was down to USD 76.93/MMBtu on Friday. Both Brent and WTI were edging downwards on Monday morning.
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.
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