Gas prices continued to strengthen across all key gas regions in June, reflecting tighter market fundamentals.
In the US, Henry Hub jumped by 20% month-on-month to average at $2.5/mmbtu -which is close to the average breakeven cost of US gas producers. production cuts, together with strong gas-fired powgen (up by 5% yoy) and higher exports provided upward pressure on gas prices.
In contrast, in Canada there is no relief from oversupply and high storage levels, with AECO prices plunging by 36% month-on-month to an average of just $0.6/mmbtu and guess what, this is not even the cheapest gas… in Waha gas prices averaged close to 0/mmbtu -still a relief from the previous few months, when Waha was trading in deep negative territory.
In Europe, TTF prices rose by 8% to near $11/mmbtu, despite weak demand and high storage levels. lower LNG inflows, unplanned outages, geopolitical uncertainties all supported higher gas prices in Europe. together with lower carbon prices, gas-fired powgen now seems to be less competitive than the most efficient coal-fired power plants…
In Asia, JKM prices rose by more than 10% to just above $12/mmbtu -nearing the average of oil-indexed LNG prices. tighter LNG supply availability (due to outages in Australia, the US and feedgas issues in Egypt) together with very strong demand from India (up by a whooping 50% yoy) provided upward pressure on Asian prices. but are we nearing a price level which would be difficult to sustain for some of the most price sensitive Asian markets?
Source: Greg Molnar
Online platform for sharing analysis and information on Global and regional LNG markets. Weekly newsletter each Wednesday more info
Sign up to receive our weekly newsletter with new LNG market reports, presentations & analysis. Every Wednesday!
By signing up, I agree to our TOS and Privacy Policy.
© 2020 GlobalLngHub | All Rights Reserved
