Oil & Energy
EMEA Natural Gas Update: Futures Edge Lower as Global Supply Constraints Ease Gradually
European natural gas futures edged lower on Thursday, amid the recovery in flows via the strategically crucial Strait of Hormuz.Front-month Dutch TTF contracts were down 0.20% to 40.795 euros ($46.38) per megawatt hour, while UK NBP futures dropped 0.26% to 96.930 British pence ($1.28) per therm.This comes as supply constraints begin to ease, with 12 vessels transiting through the Strait of Hormuz over the past 24 hours, according to the Hormuz Strait Monitor.At the same time, seven empty Qatar-linked LNG tankers have entered the strategically crucial Strait in recent weeks, signalling a recovery in supplies, according to a Reuters report, citing ship-tracking data.QatarEnergy has also said that it expects a rapid recovery in LNG output once the Strait is safe and navigable, with plans to hit 50% of capacity within a month, and 80% within two months, according to a Bloomberg report, citing people familiar with the matter.While this is expected to ease supply constraints in the near-term, Daniel Hynes, a senior commodity strategist at ANZ, has noted that the two production lines in Qatar, which were damaged by airstrikes in recent months, "will remain offline for the foreseeable future."On the other hand, Europe is experiencing a "monstrous Heat Dome," leading to record-high temperatures across several regions, with France and the UK seeing temperatures north of 40 degrees Celsius, according to Severe-Weather EU. This is expected to result in increased air conditioner usage and thus, higher gas-fired power demand.European gas inventories remained depleted at just 47.20% of capacity, down from 56.23% during the corresponding period a year ago, according to Gas Infrastructure Europe.Inventories were also significantly below the five-year average for this period, at 61.4%, according to the Swiss Federal Office of Energy.
