European front-month spot gas fell slightly on Tuesday in the absence of any new price signals and as demand prospects remain bleak.
Weak industrial demand and fuller-than-usual gas storage have both weighed on prices for a few consecutive weeks, raising questions over how much lower prices can drop before producers recalculate energy needs.
Energi Danmark said in its latest morning report: “Day-ahead gas prices on the leading European TTF hub increased modestly yesterday, but remain close to the year-lows from last week. The front-month contract fell slightly, amid an absence of any new signals, as the market remains overall well-supplied and we could see completely filled storages ahead of the upcoming winter, as we did last year.”
The continent’s benchmark futures fell on Tuesday, with TTF down 2.3% to USD 9.20/MMBtu, while NBP saw a minor 0.3% downtick to USD 8.22/MMBtu.
JKM also remained almost unchanged, down 0.2% to USD 9.74/MMBtu.
In the US, front-month Henry Hub prices fell 3.3% to USD 2.32/MMBtu, which was the marker’s third-consecutive decline. The reasons for the price weakness mirrored those in Europe: lukewarm demand and plentiful supply.
Meanwhile, crude prices rose on Tuesday on forecasts for a tighter gasoline market and a warning from the Saudi energy minister to speculators that raised the prospect of further OPEC+ output cuts, Reuters reported.
Brent settled at USD 76.84/barrel, up 1.1% and WTI was USD 72.91/barrel, up 1.2%.
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.
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