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EMEA Natural Gas Update: Futures Ease on Profit Taking Amid Tight Supplies

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European natural gas futures eased further in after-hours trade on Tuesday, retreating from fresh 2023 highs hit in the previous session as traders locked in profits.

Front-month Dutch TTF futures fell 3.78% to 79.445 euros ($91.69) per megawatt-hour, while British NBP futures dropped 3.733% to 197.53 British pence ($2.66) per therm.

Despite the pullback, the European gas market remains well supported as ongoing Middle East conflicts dim hopes of an imminent increase in LNG flows from the Persian Gulf, Mitrade said.

Further supporting prices, pre-winter maintenance disrupted Norwegian gas flows, adding uncertainty to Europe's winter supply balance, Trading Economics said. Argus said the most disruptive maintenance so far has been on the Norwegian continental shelf, weighing on exports to Europe, including the UK. Deliveries fell to 3.23 terawatt hours per day this month, down from 3.63 TWh/d in August. The UK has borne most of the reduction and is currently Norway's lowest-priced export market. Nominated flows to the UK fell to 329 GWh/d in early September, from 701 GWh/d in August.

The fresh supply curtailment comes as Europe continues to struggle to refill gas inventories. EU storage was 68.26% full, down from 80.60% a year earlier, according to Gas Infrastructure Europe. Inventories were also below the five-year average of 84.5%, according to the Swiss Federal Office of Energy.

European buyers are competing with Asia for cargoes. Moves in the JKM-TTF spread suggest Europe should be attracting spot LNG, but the region will struggle to reach its 75% storage target before winter, Mitrade said.

Japan's JERA expects LNG prices to remain relatively firm over the next year as it takes time to restore Qatar's LNG facilities damaged during the Iran war and for Europe to replenish stocks ahead of winter, Chairman and Global CEO Yukio Kani said Wednesday.

JERA, Japan's largest LNG buyer and top power generator, also expects European demand to support prices if the region proceeds with plans to phase out Russian gas on Jan. 1, forcing it to secure more LNG from the spot market, Reuters reported Kani as saying on Tuesday.

Reuters also reported that Shell, the world's biggest LNG trader, estimates a conflict-related loss of about 36 million tons of LNG from the Middle East so far this year.

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Commodities

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Commodities

US Treasury Amends Venezuela License to Block Citgo Governance Changes

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Commodities

US Natural Gas Update: Futures Climb on Demand Outlook and Crude

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