Pricewatch | 20 Apr 2023 | Gas Matters Today

European natural gas front-month contracts on Monday dipped to their lowest levels since July 2021, as market fundamentals have come back into play.

The focus has returned to a healthy supply situation, with storage levels much higher than average, despite limited LNG import due to strikes in France and maintenance in Norway.

In addition, power generation from wind is piking up pace. According to National grid ESO, wind generated 34% of British electricity on Wednesday, which exceeded the share of gas, which accounted for 29%. In Europe, the share of wind in total power generation was 16.3%, with Denmark seeing share surge to 56% and to 32% in Germany, WindEurope reported.

TTF saw a 5.7% plunge to 12.94/MMBtu, while NBP fell 5.5% to USD 11.96/MMBtu. Both benchmarks were at their lowest since at least July 2021. JKM has also witnessed more activity, with the Asian LNG marker moving down 2.8% to USD 12.25/MMBtu.

Meanwhile, US prices dipped in anticipation of the upcoming weekly storage report from the government for the week ended 14 April. The injection is widely expected to exceed both the five-year and the year-ago averages.

Therefore, Henry Hub has seen the price fall 6.1% to USD 2.22/MMBtu on Wednesday, reversing its three-day-in-a-row upward trend.

Gains over the past three sessions could be attributed to some combination of recent colder forecast trends, LNG export strength, a dip in domestic production and “seasonal buying ahead of summer,” NatGasWeather reported.

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.