Pricewatch l 28 Jun 2023 I Gas Matters Today

European natural gas prices started rising again on Tuesday, as cooler weather and ongoing supply issues in Norway came back into play.

According to Energi Danmark’s morning report, bearish fundamentals appeared to play only a secondary role on Tuesday, as cooler and windier conditions and plentiful gas storage were seemingly outweighed by the current supply situation, that still shows limited Norwegian flows due to maintenance works.

It added: “Some further increase in flows is expected by the middle of next week when ongoing works are scheduled to end. While further gains cannot be ruled out, some setback seems equally possible.”

As a result, TTF surged by 8.4% to USD 11.08/MMBtu, while NBP saw a more moderate 7.1% advance to USD 10.86/MMBtu.

Meanwhile, traction was also reported for JKM spot prices, with the contract rising 2.4% to USD 12.07/MMBtu.

According to the EU Agency for the Cooperation of Energy Regulators's (ACER's) 2023 Monitoring Report, an improved demand-supply balance has driven energy prices further down during the last months of 2022, but with the supply still tight overall, prices remain exposed to unexpected developments.

Asian LNG demand remains an important factor for EU gas prices going forward, ACER reported.

In the US, Henry Hub lost 1.1% and settled at USD 2.76/MMBtu, on belated effects of the easing of the geopolitical risk surrounding Russia and the Wagner Group’s reportedly failed coup.

But attention remains on Texas, where power use for cooling has hit a preliminary all-time high on Tuesday. The Electric Reliability Council of Texas (ERCOT) said power use reached a preliminary 80,828 MW at 6 pm Central Standard Time (CST), topping the grid's previous record of 80,148 MW set on 20 July 2022.

Oil dipped by over 2% on signals that central banks may not be done with interest rate hikes, and industry data showing lower US crude and gasoline inventories during the peak summer driving season, Reuters reported.

Brent was down 2.6% to USD 72.26/barrel, and WTI was down 2.4% to USD 67.70/barrel.

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.