Pricewatch l 1 May 2024 I Gas Matters Today

US month-ahead gas was back below USD 2/MMBtu on Tuesday, with the June contract closing at USD 1.99/MMBtu, down 1.9% from USD 2.03/MMBtu on Monday. The month-ahead price had jumped from USD 1.61/MMBtu on Friday, when the May contract expired.

The fall came as doubts surfaced over reports regarding the successful re-start of a liquefaction train at Freeport LNG and ahead of today’s Federal Reserve meeting – with the prospect of interest rate cuts this year fading – and tomorrow’s storage data from the Energy Information Administration. Traders are anticipating a smaller-than-usual injection for the time of year.

European front-month natural gas futures continued their sawtooth trading pattern of the past week, up yesterday but back on their way down in early trading on Wednesday.

In continental Europe, TTF closed up 3.7% from USD 8.80/MMBtu on Monday to USD 9.13/MMBtu on Tuesday, but much of the gain evaporated early on Wednesday.

In the UK, NBP was also up 3.7%, from USD 8.62/MMBtu to USD 8.93/MMBtu but moving down on Wednesday morning.

After an exceptionally mild winter, April has been a cooler-than-usual month in north-west Europe, especially over the past fortnight, as evidenced by storage data from Gas Infrastructure Europe (GIE).

European Union storage levels were rising in the first half of the month but then plateaued or even declined in the second half. The month began with storage at 59.1%, rising to 62.0% by mid-month and edging up to 62.1% by Monday.

In the UK, the month began with storage at 40.2%, rising to 47.3% by mid-month and falling to 39.7% by Monday.

Playing a significant role in the second half of the month was the relatively low level of wind power in Europe, with its share of electricity generation mostly well below a fifth and dipping into a single-figure percentage – 9.2% – on the 25th.

In Asia, the JKM LNG price was up 1.2%, from USD 10.21/MMBtu on Monday to USD 10.34/MMBtu on Tuesday, with the TTF-JKM spread narrowing from USD 1.41/MMBtu to USD 1.21/MMBtu.

Crude oil prices moved downwards amid hopes that some kind of ceasefire and hostage agreement may be reached in the war between Israel and Hamas in Gaza, with US secretary of state Antony Blinken once again in the region to encourage progress.

Brent was down 0.6% to USD 87.86/barrel, while WTI fell 0.8% to USD 81.93/barrel. Prices took a tumble on Wednesday morning, with Brent dipping below USD 85/barrel for the first time since March in late morning trading.

The politics in and around the Middle East are currently unusually complex.

Israel’s prime minister Benjamin Netanyahu has said an offensive will be mounted on the southern city of Rafah in Gaza, whether or not a ceasefire is agreed.

Meanwhile, the International Criminal Court (ICC) in The Hague is considering whether to issue arrest warrants for alleged crimes in Gaza and Israel, with some commentators speculating that the court may target leaders of both Hamas and Israel, including perhaps even Netanyahu. Israel’s allies have warned this would jeopardise any potential ceasefire.

In the US, student protests over the war in Gaza moved into a new phase yesterday when police arrested over 100 protestors at Columbia University in New York. The move ­– broadcast live on television – has prompted comparisons with 1968, when a similar action escalated tensions and led to the resignation of the then president of the university.

More than a thousand people have been arrested since the now-nationwide protests began.

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.