Natural Gas Price Benchmarks

(Greg Molnar) As prices continued to gain in September across Asia and Europe, whilst Henry plummeted again below $2/mmbtu.

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In Europe, TTF returned to above last year’s price levels for the first time in 2020, with an impressive jump of 50% month-on-month, primarily supported by recovering gas demand (+3.5%) and plummeting LNG influx, down by 15% yoy.

In Asia, JKM followed TTF, up by 34% and primarily supported by buoying buying interest in China and India, with LNG imports up by 17% and 15% respectively. This is against a tighter LNG supply, with unexpected outages weighing on Australian (Gorgon) and US LNG output (Cameron still down after Hurricane Laura). Meanwhile, oil-indexed LNG prices are falling now to the $5-6/mmbtu range, the lowest since 2016.

After strong gains in August, Henry Hub fell again below $2/mmbtu mark on weaker demand from powgen (down by 20% mom) and demand destruction resulting from hurricanes and wild storms. Henry was all over the place, with spot volatility reaching 200%, the highest on record for a September month.

What is your view? Will the bull run in continue through the heating season as the forward curve suggests? Or could the high storage levels moderate further growth? Happy New Gas Year folks!

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