28 April 2024
Pricewatch | 22 Oct 2020 | Gas Matters Today
Publication date: 22 October 2020
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US gas benchmark Henry Hub yesterday broke through the USD 3/MMBtu threshold for the first time since early 2019, as the front-month contract rose 3.8% to settle at USD 3.02/MMBtu on flattening output and rising exports of US LNG [2]. Prompt HH has not been this expensive since 25 January 2019, when it hit USD 3.18/MMBtu. The month-ahead contract has soared 65% over the past month, having struck a low of USD 1.83/MMBtu on 22 September 2020.
European gas hubs NBP and TTF were virtually unchanged, while CME’s December-dated JKM futures contract gained 2.7% to close at USD 6.73/MMBtu.
Crude oil prices fell sharply on growing concerns over global oil demand in the face of rising Covid-19 infections and the renewed imposition of lockdowns and travel restrictions across Europe and internationally, which overshadowed mildly encouraging data on US crude stocks. Brent fell 3.3% to USD 41.73/barrel and WTI fell 4% to USD 40.03/barrel, although the sell-off might have been overdone as both were trading up by around 0.5% on Thursday morning.
The European carbon price crashed to a four-month low on Wednesday, as month-ahead ETS allowance (EUA) futures fell 3.4% to close at EUR 23.57/tonne – the lowest closing price for ICE’s front-month EUA contract since 17 June 2020. The descent seems to reflect growing market expectations that Covid-19 could hamper industrial activity in Europe and depress demand for EUAs.
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 reserved.