US natural gas prices were back in the producers’ comfort zone on Wednesday, as the October Henry Hub contract became the front month, following the expiration of the September contract at Wednesday’s close, with storage data looking bullish.
The October contract closed at USD 2.14/MMBtu, up 2% from USD 2.10/MMBtu on Wednesday, and 10.7% higher than the closing price of the September contract on Wednesday of USD 1.93/MMBtu.
In its weekly gas storage report yesterday, the Energy Information Administration estimated working gas in storage at 3,334 Bcf as of 23 August, within the five-year historical range. Stocks were 228 Bcf higher year-on-year and 361 Bcf above the five-year average of 2,973 Bcf for this time of year.
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Natural gas prices in Europe and Asia barely budged as the respite from recent volatility continued into a second session.
In continental Europe, TTF was down 0.2% to USD 12.53/MMBtu, primarily because of foreign exchange impacts. In local currency, there was a rise of 0.2% to EUR 38.60/MWh.
In the UK, NBP was down 1.3%, from USD 12.24/MMBtu on Wednesday to USD 12.08/MMBtu. In p/therm the fall was 1.1%.
Both TTF and NBP were on an upwards trajectory on Friday morning.
While European gas markets have plenty to think about at present, storage levels provide a welcome buffer.
According to data from Gas Infrastructure Europe, storage in the European Union is 91.98% full, well ahead and above the 90% target for the start of the heating season. Even in the UK, where levels tend to be more volatile, storage is at 66%, the highest it has been since February.
As the start of heating season inches closer, much will now depend on what kind of winter Europe experiences. Winters have been getting warmer and last winter was unnervingly mild in much of the continent.
In Asia, the JKM LNG benchmark was down 0.4% to USD 14.01/MMBtu, narrowing the TTF-JKM spread to USD 1.48/MMBtu.
Crude oil prices were up, amid the continuing shutdown of most of Libya’s production because of a dispute between rival governments in the east and west of the country.
Brent rose by 1.6% to USD 79.94/barrel while WTI was up 1.9% to USD 75.91/barrel. Prices were edging upwards on Friday 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.
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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