FINWIRES · TerminalLIVE
FINWIRES

Supply Signals Weigh on Near-Term Prices as Geopolitical Risk Fades, EBW Says

By

Energy markets are turning more defensive in the near term as a combination of bearish supply signals and easing geopolitical risk premiums reshapes sentiment across gas, oil, and power, EBW analysts said in a note on Sunday.

Natural gas was pressured by a large storage build, reinforcing expectations of looser balances heading into mid-summer. At the same time, improving crude supply outlooks and fading geopolitical tensions have reduced the risk premium that had previously supported broader energy pricing.

Even so, weather-driven demand continues to inject volatility, with intermittent heat waves lifting power loads and supporting short bursts of gas burn. Strong LNG exports remain a key counterbalance, holding firm and preventing a more rapid deterioration in fundamentals.

Regional electricity markets have reflected this push-and-pull dynamic. Heat-driven demand spikes have produced sharp price surges in select hubs, while more moderate conditions elsewhere have limited sustained upside. The result is a market characterized by episodic strength rather than a durable trend.

Crude oil markets are also adjusting to shifting expectations. Supply confidence has improved, while geopolitical concerns that previously supported prices have eased. That combination has softened sentiment, though physical tightness has not fully disappeared and continues to surface in localized price moves.

Related Articles

Commodities

Oil Drops to Two-Month Low on US-Iran Peace Deal to End War

Oil prices fell Monday morning in Asia following news that a memorandum of understanding to end the war between the US and Iran has been finalized, clearing the way for the reopening of the Strait of Hormuz.As of Monday morning in Asia, West Texas Intermediate (WTI) crude oil dropped 4.75% to trade at $80.85 per barrel. Brent crude oil fell 3.98% to $83.85 per barrel, hitting a two-month low."The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade," U.S. President Donald Trump wrote on Truth Social.A signing ceremony for the MOU is expected to take place in Switzerland on Friday, Pakistani Prime Minister Shebaz Sharif wrote in an X post.Pakistan is acting as the neutral mediator in the conflict between the U.S. and Iran."Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and Islamic Republic of Iran has been REACHED. Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon," Sharif wrote.

$BASI.MN$CANA.MN$COMM.MN$GPMK.MN$NOAM.MN$OIL.MN$OILG.MN$SSR.MN
Commodities

Natural Gas Prices Fall For 2nd Straight Week Amid Bearish Storage Build, Weak LNG Feedgas Flows

US natural gas markets were down for yet another week, following a larger-than-expected storage build and lower average LNG feedgas flows so far this month.In the futures market, the Nymex front-month contract dropped to $3.04 per million British thermal units on Friday, from $3.22/MMBtu on June 5.Natural gas spot prices, however, rose by $0.31/MMBtu to $3.26/MMBtu during the week ended June 10, from $2.95/MMBtu the prior week, according to the US Energy Information Administration's Weekly Gas Storage Supplement, released on Thursday.Prices rose across all major regional hubs this week, with a $0.16/MMBtu rise at the Waha Hub and a $0.94/MMBtu surge at Florida Gas Zone 3.This comes amid an increase in natural gas consumption by 2.7 billion cubic feet per day, or 3% compared to the previous week, according to LSEG data, driven by 3.5 Bcf/d, or 10% increase in consumption from the power sector, due to above-normal temperatures across Northern and Central US over the past week.Total gas supplies also declined during the period, by 0.5 Bcf/d, due to a 0.7 Bcf/d drop in output, which wasn't enough to offset the drop in consumption.US LNG Feedgas flows recovered this week, averaging over 17 Bcf/d, after hitting a multi-month low late last week, due to ongoing spring maintenance across several leading LNG facilities, which continued to weigh on flows. However, the June average was 16.5 Bcf/d, down from 17.5 Bcf/d in May, according to TradingEconomics.The net injection into storage for the week ended June 5 was 108 Bcf, up from 95 Bcf the prior week, bringing total gas inventories to 2,686 Bcf, according to EIA data.For the first time in weeks, the net build came in above consensus estimates at 101 Bcf, was ahead of the five-year average for this period at 95 Bcf, and was just shy of the prior year's 110 Bcf, according to data compiled by Investing.com, making it a bearish signal for the markets.All regions reported a net injection of working gas into storage for the week ended June 5, with inventories across the Pacific, Mountain, and Midwest regions higher by 15%, 6%, and 1%, respectively, compared to the prior year, while South Central and East were lower by 5% and 2%.At 2,686 Bcf, US working gas inventories were 5 Bcf, or less than 1% below the corresponding period a year ago, while still posting a 151 Bcf, or 6% surplus compared to the five-year average for this period.According to Pinebrook Energy Advisors, the latest storage reports point towards "weaker natural gas consumption than preliminary estimates had implied," while also hinting at potentially stronger-than-expected wind and solar generation.Weather forecasts have continued to indicate above-normal temperatures across most of the country from June 19 to June 25, according to the National Weather Service, leading to increased demand for space cooling and, thus, higher gas-fired power burn.A total of 34 liquefied natural gas-carrying vessels left US ports during the week, up from 29 vessels the previous week, with a total capacity of 129 Bcf, up by 18 Bcf from the prior week.Meanwhile, the US gas rig count slipped by three from 124 the previous week to 121 in the week ending June 12, according to data from Baker Hughes (BKR) released Friday. That compares with 113 gas rigs in operation a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, rose by 10 to 742 from 732 the previous week.In international markets, European TTF gas prices averaged $16.65/MMBtu for the week ended June 10, $0.38/MMBtu higher than the previous week. Meanwhile, the Japan-Korea Marker averaged $18.85/MMBtu, about $0.30/MMBtu higher than the prior week.

$BKR
Commodities

Jera Receives First LNG Cargo From Australia's Barossa Project

Jera received its first liquefied natural gas cargo from Australia's Barossa Gas Project, marking the start of deliveries to Japan, the company said Friday.Japan's power generation company took delivery of the cargo at its Futtsu LNG terminal on June 12 after the Barossa project began producing LNG in late 2025, Jera said.Located offshore Australia's Northern Territory, the Barossa field supplies gas to the Darwin LNG facility for processing before export to international markets.The project can produce about 3.4 million metric tons of LNG annually. Through its subsidiary, Jera Australia, the company expects to offtake about 425,000 tons per year based on its ownership interest.Jera said Australian LNG remains a key part of its procurement strategy as it continues to expand and diversify its supply sources across its global portfolio.The company counts Barossa among its largest Australian investments alongside its stake in the Wheatstone LNG Project and its investment in the Scarborough Gas Field Development, which is expected to begin production later this year."Securing stable and competitive LNG supply for Japan, in a highly volatile market, remains Jera's utmost priority. A diversified global LNG supply allows us to decrease the impact of supply shocks," chief operating officer of Jera's LCF Business, Irtiza Sayyed, said.Jera said it will continue diversifying its LNG portfolio by balancing supplies from the Asia-Pacific region, the Middle East, the US and other markets.The company also plans to leverage capabilities spanning upstream development, procurement, transportation and power generation to support stable, flexible and secure energy supplies for Japan.