Pricewatch l 6 June 2024 I Gas Matters Today

Crude oil prices appeared to find a floor on Wednesday after a week-long slide that saw them tumble by around 8%.

While the recent decision by OPEC+ members to begin reducing voluntary output curbs from October continues to exert a bearish influence on the market, hopes are rising that interest rate cuts later in the year will boost economic growth and therefore demand for oil.

Brent was up 1.1% to USD 78.41/barrel while WTI gained 1.1% to reach USD 74.07/barrel. Both were up by another percentage point or so in early trading on Thursday.

Yesterday’s weekly petroleum status report from the US Energy Information Administration (EIA) showed an increase of 1.2 million barrels in commercial crude oil inventories to 455.9 million barrels, 4% below the five-year average for this time of year.

US natural gas futures continued their wild swings of recent days, with Tuesday’s fall of 6.2% matched by a 6.6% rise on Wednesday to USD 2.76/MMBtu. Uncertainty over gas production levels in the Lower 48 states was more than offset by forecasts of hotter weather to come later in the month.

The EIA’s weekly gas storage report is due out later today.

European gas prices continued to fall as expectations grew of a return to service on Friday of the Nyhamna gas processing plant in Norway and the UK’s Easington terminal. Repairs are underway at the Sleipner Riser pipeline hub, which was put out of action by the rupture of a 2-inch diameter pipe.

In continental Europe, the July TTF contract was down 0.8%, from USD 10.74/MMBtu on Tuesday to USD 10.66/MMBtu on Wednesday, but edging upwards on Thursday morning.

In the UK, month-ahead NBP was down 1.1%, from USD 10.27/MMBtu to USD 10.16/MMBtu. Like TTF, it was on a gentle upwards trajectory on Thursday morning.

In Asia. the JKM LNG benchmark remained stable, falling by just 0.2%, from USD 11.99/MMBtu to USD 11.97/MMBtu. The TTF-JKM spread widened to USD 1.31/MMBtu.

European coal prices gave up some of Monday’s dramatic gains. API2 fell by 4.1%, from USD 4.68/MMBtu on Tuesday to USD 4.48/MMBtu on Wednesday, as near-term gas supply worries eased with the expected return to service of Nyhamna tomorrow.

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.