Natural gas markets tightened in August amidst sizzling heatwaves and rising supply concerns. Of course we remain well-below the rollercoaster prices of last year.
In Europe, TTF month-ahead prices rose by 17% compared to July, amidst heavy maintenance in Norway, lower LNG inflows and rising supply concerns amidst potential strikes in Australia.
While Europe does not receive a single molecule of Aussie gas, a potential strike at Gorgon and Wheatstone could rapidly heat up competition for spot LNG cargos. And while gas prices strengthened, we are still 80% below last year’s record breaking price levels.
In Asia, JKM prices followed similar price trajectory and rose by 6% to an average of over $12/mmbtu, primarily supported by stronger LNG demand from China (up by 35% yoy) and Australian strike risks.
JKM also maintained its premium compared to TTF, pulling away LNG cargoes from the European shores.
In the US, sizzling heatwaves drove up gas burn in the power sector to record highs and supported Henry Hub prices at $2.6/mmbtu, despite strong production growth.
What is your view? How will gas prices evolve in the coming month before the start of the heating season? More volatility in the mix?
Source: Greg Molnar