Pricewatch l 27 September 2023 I Gas Matters Today

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Oil prices resumed their upward trajectory towards USD 100/barrel on Tuesday – after a week’s hiatus from their months-long rally – and were moving upwards again on Wednesday morning.

Continuing self-imposed curbs on exports by Saudi Arabia and Russia combined with an easing of concerns on the near-term prospects for the US economy have led to renewed perceptions of market tightening, with supply constrained and upward pressures on demand.

Brent was up 0.7% on Tuesday, from USD 93.29/barrel on Monday to USD 93.96/barrel, while WTI was up 0.8%, from USD 89.68/barrel to USD 90.39/barrel.

European natural gas prices took a sharp downward turn on Tuesday after the surprising jumps on Monday, as fundamentals reasserted their influence and concerns over remaining Russia pipeline gas imports waned. Prices fell further on Wednesday morning, but with significant intra-day volatility.

It has become clearer that Russia’s ban last week on exports of certain liquid fuels is a response to domestic shortages – which most observers expect to last for weeks rather than months – rather than any geopolitical intent.

Meanwhile, storage facilities in the European Union were more than 95% full on Monday, according to Gas Infrastructure Europe (GIE) data, and the near-term forecast is for continuing mild autumnal weather.

TTF front-month futures fell by 9.4% on Tuesday, from USD 13.79/MMBtu on Monday to USD 12.49/MMBtu, reversing virtually all of Monday’s rise. In the UK, NBP moved in lock-step, down 9.7% from USD 13.77/MMBtu on Monday to USD 12.44/MMBtu on Tuesday. In local currency terms, both TTF and NBP were down 9.3%.

In Asia, JKM fell by 2.3%, from USD 14.99/MMBtu on Monday to USD 14.65/MMBtu on Tuesday. The TTF-JKM spread was up 80% to USD 2.16/MMBtu.

In the US, Henry Hub was little changed, rising by 0.6%, from USD 2.64/MMBtu on Monday to USD 2.66/MMBtu on Tuesday.

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.

Contact the editor:

Andreas Walstad
[email protected]

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