European natural gas prices rose on Tuesday as an extended outage at Norway's Ormen Lange gas field added to concerns over supplies ahead of winter, while the region's storage deficit widened, Rystad Energy strategists said in a note on Thursday.
Dutch Title Transfer Facility September contract settled at $20.10 per million British thermal units on Aug. 11, up 6.7% from a week earlier.
Rystad analysts said that Norway's Ormen Lange field, operated by Shell (SHEL), is now expected to remain affected by the outage into February 2027.
The consultancy said output has been reduced by about 40%, or 8.9 million cubic meters per day, a loss equivalent to roughly 11-12 liquefied natural gas cargoes for Europe.
The disruption comes as Europe's gas inventories lag last year's levels and the market remains sensitive to developments in the Middle East, including uncertainty around negotiations over the Strait of Hormuz.
Beyond geopolitics, price pressure is mounting as Europe faces an extended Norwegian gas outage amid a further widening storage gap, said Jan-Eric Fahnrich, senior analyst for gas and LNG research at Rystad Energy.
Gas stored in the European Union and Britain stood at 67.4 billion cubic meters on Aug. 11, equivalent to 59.12% of available capacity. Rystad analysts said the deficit compared with the same point last year widened to 14.79 bcm from 13.91 bcm a week earlier.
However, despite the tighter supply outlook, forward prices indicate Europe could attract uncommitted US LNG cargoes from October. Europe is also receiving some additional cargoes originally destined for Egypt after an earlier drone strike disrupted the country's import infrastructure.
Asian LNG prices also rose, but at a slower pace than in Europe, potentially increasing the attractiveness of European markets for flexible US cargoes.
Rystad said that the East Asian LNG price for October delivery rose 4.7% from a week earlier to $21.69/MMBtu on Aug. 11.
Lower LNG freight rates, however, are reducing the premium Asian buyers need to pay relative to Europe, while demand from South Asia remains strong.
Japan's power sector is also facing several disruptions. Chugoku Electric's 820-megawatt Shimane nuclear reactor No. 2 is expected to restart on Aug. 17 after an unplanned extension to maintenance.
If gas-fired generation were to replace the nuclear capacity for a full month, the outage could add about 79,000 metric tons of LNG demand.
Kansai Electric's 1.18-gigawatt Ohi nuclear reactor No. 3 went offline on Aug. 9 after an alarm was triggered. No restart date had been announced as of Aug. 11.
LNG inventories held by major Japanese power utilities edged up to 2.03 million mt from 2.02 million mt over the previous two weeks.
Bangladesh's Excellence floating storage and regasification unit resumed LNG sendout after a fire forced it offline from July 22 to Aug. 5.
Meanwhile, the US gas market remains considerably looser than those in Europe and Asia, limiting upward pressure on prices.
Front-month Henry Hub gas rose 3.2% on the week to $2.77/MMBtu on Aug. 11, but remained below $3/MMBtu as strong domestic production outweighed higher power-sector demand during a period of severe heat.
The Energy Information Administration said that the US natural gas inventories rose by 33 billion cubic feet in the week ended July 31 to 3,117 Bcf, with the build exceeding both the increase a year earlier and the five-year average.
Rystad said that power-sector gas consumption rose 3.2% to 50.14 billion cubic feet per day in the week ended Aug. 10, while LNG feedgas demand increased 3.1% to 17.46 Bcfd.
Feedgas demand remained constrained by reduced flows to Freeport LNG and intermittent demand from Golden Pass.
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