Pricewatch l 22 September 2023 I Gas Matters Today

News that workers at Australian LNG facilities had agreed a deal to end industrial action had only a short-lived impact on European gas prices on Friday.

TTF futures closed up on Thursday and, while they plunged by over 6% in early trading on Friday, they were soon tracking higher on lingering concerns over pipeline gas supply from Norway and new concerns over LNG supply from the US.

Following news on Thursday that Chevron – operator of the Gorgon and Wheatstone liquefaction plants in Western Australia – had agreed terms put forward by the Fair Work Commission, it later emerged that the unions in the Offshore Alliance (OA) had also agreed them.

In a statement on social media, the Australian Workers' Union, one of the two unions represented by the OA, said: “The OA will now engage in drafting discussions with Chevron to ensure that the recommendations from the Commissioner are accurately incorporated into the agreements. During this period, industrial action will cease.”

European prices are still being supported by concerns over ongoing disruptions to supplies from Norway, where maintenance work has not gone to plan, and the extension of works on the Norway link to the UK’s St. Fergus natural gas terminal. Concerns are also emerging over a dip this week in gas supply to the largest LNG export project in the US – Cheniere Energy’s Sabine Pass.

TTF front-month futures climbed again on Thursday by 4.4%, from USD 11.71.MMBtu on Wednesday to USD 12.22/MMBtu. The contract opened significantly lower on Friday morning on the news from Australia but had climbed to well above Thursday’s close by lunchtime.

In the UK, NBP was up 4.7% on Thursday, from USD 11.81/MMBtu on Wednesday to USD 12.37/MMBtu and moved along much the same trajectory as TTF on Friday.

In Asia, JKM edged up 0.6% on Thursday, from USD 14.24/MMBtu on Wednesday to USD 14.33/MMBtu. It remains to be seen what the impact on TTF will be from the end of industrial action in Australia. Early indications are that the price is likely to fall.

In the US, the weekly gas storage report from the US Energy Information Administration (EIA), released on Thursday, estimated working gas in storage was 3,269 Bcf as of September 15, up 64 Bcf from the previous week and within the five-year historical range. Stocks were 410 Bcf higher year-on-year and 183 Bcf above the five-year average of 3,086 Bcf.

Henry Hub saw another fall, by 4.5%, from USD 2.73/MMBtu on Wednesday to USD 2.61/MMBtu on Thursday.

Oil prices fell for the third consecutive day, with Brent down 0.2% from USD 93.53/barrel on Wednesday to USD 93.30/barrel on Thursday. WTI was down 0.7%, from USD 90.28/barrel to USD 89.63/barrel.

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.