Pricewatch | 08 Jul 2021 | Gas Matters Today

European gas prices continued to plummet on Wednesday as the technical sell off extended for a second day.

The month-ahead TTF and NBP contracts fell by over 5% on Wednesday, with the UK gas benchmark sliding back into the USD 10/MMBtu range and the Dutch marker remaining in the USD 11/MMBtu range.

The fall was largely attributed to a technical sell off which started on Tuesday, however some market observers suggest that the falling European carbon price is also weighing on the European gas markers.

The July-dated carbon contract fell by 2.6% on Wednesday to settle in the EUR 52/tonne range – its lowest close since 21 June.

The sliding European gas prices are weighing on Asian LNG marker JKM. The August-dated JKM contract fell by 1.6% to settle at USD 12.69/MMBtu.

In the US, gas benchmark Henry Hub fell for a second day, with the marker down 1.7% to close in the USD 3.5/MMBtu range. The front-month contract has been falling amid lower LNG feed gas levels in recent days and forecasts of cooler weather along the US Gulf Coast – reducing gas demand for air conditioning.

Crude prices continued to retreat on Wednesday amid ongoing uncertainty over supply after OPEC and its allies failed to reach a deal over potentially raising production from August through to the end of the year.

Brent and WTI fell by ~1.5%, with the international crude benchmark sliding back into the USD 73/barrel range and the US benchmark settling in the USD 72/barrel range.

Whilst gas and oil continued to fall, European coal continues to tick higher, with the front-month API2 contract up 0.8% to settle at USD 124.6/tonne on Wednesday.

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.