Natural gas price benchmarks: wait and see

Natural gas price benchmarks moderated down from their October highs, although remaining at historic highs both in Europe and Asia amidst tight market fundamentals.

In Europe, TTF averaged at $27/mmbtu, down by over 10% compared to October when it hit over $30%. this is despite tighter market fundamentals: European demand was up by 6% yoy on colder temperatures and higher space heating demand, while Russian flows to the EU fell by close to 25% yoy. LNG inflows and Norwegian deliveries edged higher, although not enough to make up for the widening supply-demand gap, which led to an aggressive draw down from European storages, standing now below 69%.

In Asia, JKM prices remained steady at $33/mmbtu, with higher shipments to Asia providing some support to the benchmark, despite lower LNG inflows to Japan, Korea and India.

In the US, Henry stood at $5/mmbtu, down by 10% compared to its October levels. production was by 5% yoy, providing some downward pressure on prices, although demand continued to grow stronger, up by 10%.

What is your view? how will prices evolve through December? Market fundamentals are tightening further although market sentiment has been improving… any forecasts in this gassy crystal ball?

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Source: Greg MOLNAR (LinkedIn)