Pricewatch l 12 Jun 2023 I Gas Matters Today

European gas prices rose sharply on Friday, partly due to warm weather in most of Europe leading to higher demand for electricity for cooling. There were also signs of increasing competition from Asia for LNG.

The Dutch TTF benchmark saw a 18.6% surge in front-month prices to USD 10.10/MMBtu. The UK NBP marker price soared 23% to USD 9.78/MMBtu, driven by the anticipation of the warmest weather so far this year in England.

The market could tighten as Asian countries also step up efforts to import more LNG due to a heat wave in parts of Asia. In addition, several Norwegian gas fields have been shut down for some time, reducing Europe’s major supplier’s gas flows for the time being.

In the US, the price trend was opposite to that in Europe, with Henry hub down 3.8% to USD 2.26/MMBtu, amid expectations of a milder heatwave than initially anticipated in the beginning of July.

This came despite reports that energy firms cut the number of oil and natural gas rigs operating for a sixth week in a row for the first time since July 2020, as reported by Baker Hughes in its report on Friday.

The oil and gas rig count, an early indicator of future output, fell by one to 695 in the week to 9 June, the lowest since April 2022. US oil rigs rose one to 556 this week, while gas rigs fell two to 135, their lowest since March 2022.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge): Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.