Natural gas prices continued to slide across all key gas markets in February amidst unseasonably mild weather and improving supply conditions.
In Europe, TTF prices fell almost 40% year-on-year to an average of $17/mmbtu. Lower demand (down by 6% yoy), strong LNG and high inventory levels (50% above 5y average) all provided downward pressure on gas prices. And while those prices seems to be low compared to last year’s record highs -they are still three times above historic price levels.
In Asia, JKM prices followed suite, falling by 33% compared to last year to average at $17/mmbtu. China’s demand remained close to last year’s levels and its evolution will be key in determining whether we are heading to a tighter or more loose market in 2023…
In the US, Henry Hub prices are traded almost 50% below last year’s levels at an average of $2.4/mmbtu. Unseasonably mild weather crashed residential and commercial demand, which was down by 14% yoy. US storage levels stand now 20% above their 5y average, giving comfort for the remainder of the heating season.
And Canada’s AECO followed its buddy Henry, dropping by over 40% to $2.1/mmbtu, amidst milder weather and lower exports to the US.
What is your view? How will gas prices evolve now, as we are heading out of the heating season?