Natural gas prices were down on Friday in Europe, Asia and the US, with weather forecasts playing a central role, as autumn in the northern hemisphere continues to be much milder – if windier – than normal.
However, prices diverged on Monday as colder weather was forecast for the US, while in North-West Europe Storm Debi brought temperatures well above the seasonal average, after a brief cold snap over the weekend.
News over the weekend that Israeli had ordered the resumption of natural gas production at the Chevron-operated offshore Tamar field – which was shut in after the Hamas attacks on 7 October – added to downward pressures, with European prices continuing to fall on Monday morning.
In Continental Europe, TTF front-month futures fell by 3.3%, from USD 15.11/MMBtu on Thursday to USD 14.60/MMBtu on Friday.
In the UK, NBP was down 3.9%, from USD 14.98/MMBtu on Thursday to USD 14.40/MMBtu on Friday.
Both TTF and NBP were moving downwards on Monday morning, though on significantly different trajectories, with wind power at a high level in the UK as Storm Debi strengthened.
In Asia, JKM continued weeks of gentle decline, falling by 0.4%, from USD 17.26/MMBtu on Thursday to USD 17.19/MMBtu on Friday. The steeper fall in TTF meant the TTF-JKM spread widened by 20%, from USD 2.15/MMBtu to USD 2.59/MMBtu.
European coal prices were influenced by natural gas prices, with API2 coal down 1.6%, from USD 5.07/MMBtu on Thursday to USD 4.99/MMBtu on Friday.
In the US, Henry Hub edged down by 0.3%, from USD 3.04/MMBtu on Thursday to USD 3.03/MMBtu on Friday, but was up sharply on Monday morning, with colder weather forecast for the second half of November.
Crude oil prices rallied for a second day after recent falls, with Brent up 1.8%, from USD 80.01/barrel on Thursday to USD 81.43/barrel on Friday. WTI was up 1.9% from USD 75.74/barrel to USD 77.17/barrel. Both Brent and WTI were treading water on Monday morning.
OPEC – in its latest monthly report, published on Monday – said crude oil market fundamentals remained healthy “despite exaggerated negative sentiment”.
“As global oil demand continues to demonstrate strength and resilience – with better-than-expected growth in the fourth quarter of 2023, mainly in non-OECD countries – the secretariat’s latest forecast for global oil demand growth for 2023 is revised upwards to reach 2.5 million barrels/day,” it said.
OPEC is particularly scathing about “overblown negative sentiment in the market regarding China’s oil demand”, forecasting that Chinese demand remains on track to reach a new annual record high of 11.4 million barrels/day in 2023.
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.
Subscription Benefits
Our three titles – LNG Business Review, Gas Matters and Gas Matters Today – tackle the biggest questions on global developments and major industry trends through a mixture of news, profiles and analysis.
LNG Business Review
LNG Business Review seeks to discover new truths about today’s LNG industry. It strives to widen market players’ scope of reference by actively engaging with events, offering new perspectives while challenging existing ones, and never shying away from being a platform for debate.
Gas Matters
Gas Matters digs deep into the stories of today, keeping the challenges of tomorrow in its sights. Weekly features and interviews, informed by unrivalled in-house expertise, offer a fresh perspective on events as well as thoughtful, intelligent analysis that dares to challenge the status quo.
Gas Matters Today
Gas Matters Today cuts through the bluster of online news and views to offer trustworthy, informed perspectives on major events shaping the gas and LNG industries. This daily news service provides unparalleled insight by drawing on the collective knowledge of in-house reporters, specialist contributors and extensive archive to go beyond the headlines, making it essential reading for gas industry professionals.
