Recent developments in the Middle East as well as infrastructure damage are driving European natural gas higher, and fees from the Panama Canal remain elevated as a result of the drought in the region restricting movement of cargoes.
As a result, exporters of LNG at home are increasingly favoring Europe as an economically superior option.
Given Europe’s effectively capped storage and mild upcoming winter, however, most view the newfound attractiveness of US-Europe LNG arbitrage as merely temporary given that the elevation of European prices appears somewhat disconnected from fundamentals.
The Dutch TTF European natural gas benchmark currently trades at $16.98/MMBtu.
Source: Gelber and Associates