The geopolitical outlook in the Middle East entered a dangerous new phase over the weekend when a drone strike on a US military base in Jordan led to the death of three US soldiers.
President Joe Biden said the US would respond to the attack – on a logistics support base in north-east Jordan – at a time and manner of its choosing. Biden blamed Iran-backed militants but Iran has denied being involved.
The impact on energy prices was muted, however, with early indications of only a small rise in oil prices, after a significant jump on Friday, and then a decline. European gas futures fell in early trade on Monday and then rallied over the course of the morning.
Oil prices extended their recent run of increases on Friday, with Brent rising 1.4%, from USD 82.43/barrel on Thursday to USD 83.55/barrel, the highest close since early November. WTI was up 0.8%, from USD 77.36/barrel to USD 78.01/barrel.
Both were down by four-fifths of a percentage point on Monday by early afternoon in London.
In Continental Europe, TTF front-month futures rose by 1.3% on Friday, from USD 8.82/MMBtu on Thursday to USD 8.94/MMBtu. In the UK, NBP was up 1.4%, from USD 8.69/MMBtu to USD 8.82/MMBtu.
In Asia the JKM LNG price fell again, by 1.1%, from USD 9.39/MMBtu on Thursday to USD 9.29/MMBtu on Friday, the lowest front-month close since June 2023. The TTF-JKM spread now stands at USD 0.35/MMBtu.
In the US, Henry Hub front-month natural gas futures rose by 5.5%, from USD 2.57/MMBtu on Thursday to USD 2.71/MMBtu on Friday but fell again on Monday as production continued its recovery and weather forecasts turned warmer.
European coal prices followed the lead set by natural gas, with API2 up 0.4%, from USD 4.23/MMBtu on Thursday to USD 4.24/MMBtu on Friday.
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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