In a market update sent to Rigzone on Wednesday afternoon, Rystad Energy senior analyst Zongqiang Luo noted that the first-month gas price at the Dutch Title Transfer Facility (TTF) increased by 30 percent on August 9, “exceeding $12 per million British thermal.” units (MMBtu) on news of possible attacks on LNG facilities in Australia.”
The possible strike would be led by Australian workers at Chevron and Woodside Energy Group, which may disrupt four LNG facilities, Luo noted in the update, adding that any such strike could disrupt about half of the Australia’s LNG export capacity and making many Asian buyers look. to another place for their loads.
“China and Japan bought about 26 million tonnes of Australian LNG together, more than 60 percent of the country’s exports in the first half of 2023,” Luo said in the update.
“This increase in prices reflects the likelihood that the strike will materialize, affecting LNG supplies during the ongoing heatwaves, despite ample gas inventories in Europe. On the other hand, there has been an increase in LNG prices Asian, which led to greater competition for marginal cargoes between regions,” Luo added.
“Looking ahead, we expect the bullish outlook for gas prices to continue with fewer LNG imports into Europe, planned maintenance for Norwegian pipelines and continued heatwaves in several regions of the world,” the Rystad analyst said.
European storage facilities were 87 percent full as of Aug. 6, Luo noted in the update, adding that “this trajectory of increased storage positions Europe well to exceed the mandatory target of 90% filling, which will come into force from November 1, with months to spare”.
“Going forward, the prospect of European storage reaching capacity presents the possibility of increased utilization of Ukraine’s storage facilities, which are now only 26 percent full,” Luo said in the update.
In a report sent to Rigzone on August 8, Standard Chartered analysts noted that natural gas prices in Europe and the UK “continue to rise, despite softening fundamentals of abundant supply and weak demand.”
“Dutch title transfer service for September delivery rose 1.709 euros per megawatt hour (MWh) week-on-week to 30.487 euros/MWh on August 7, up 6.02 percent ,” the analysts said in the report.
Rystad updates
In a separate market update sent to Rigzone on August 3, Rystad Energy vice president Kaushal Ramesh said first-month TTF spot gas prices had declined by about two percent for the week to just over $9 per million British thermal units, “as high inventories continue. to curb bullish sentiment from ongoing heatwaves.”
“Conversely, higher Asian LNG prices have opened up interregional competition for marginal cargoes,” Ramesh added.
“Our outlook for next week is slightly bullish due to unplanned maintenance, although upward price movements will be limited by the start of the shoulder season and economic data from ‘Europe and China less than encouraging,’ continued Ramesh.
In another market update sent to Rigzone on July 26, Rystad Energy senior analyst Masanori Odaka said gas prices on the TTF rose 20 percent weekly to about $10.7 per million units British thermals on July 25, “due to heat waves in Italy, Greece and Spain”.
“However, further upward momentum has been held back by continued high underground gas storage levels in Europe,” Odaka said in this update.
“Europe continues to inject gas into storage, with storage levels for this time of year well above 2021 and 2022 levels,” Odaka added.
“Storage facilities are 84% full at around 95 billion cubic meters as of July 24, well positioned to reach the 90% target by November,” the Rystad analyst said.
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