A shot of cold weather that settled in over the weekend across parts of Europe did little to lift natural gas prices in the region, where concerns about the winter heating season have continued to ease amid a surplus of supplies.
The December Title Transfer Facility (TTF) contract fell 6% from its close on Friday to finish near $14/MMBtu ahead of its expiration this week. Winter TTF contracts remain in contango, but their premium to the prompt month has narrowed.
Maxar’s Weather Desk forecast temperatures well below normal in Scandinavia, the northern UK and Germany over the next six- to 10-day period. However, the cold has done little so far to cut into record storage inventories for this time of year, which stood at 97.7% of capacity on Monday.
“Despite cold weather, comfortable stock levels and strong Norwegian and LNG supply continued to limit the price upside potential,” Engie EnergyScan analysts said in a Monday note.
Norwegian exports were nominated Monday at about 12 Bcf, or some of their highest levels this year. Liquefied natural gas exports also resumed from Egypt last week after additional gas started flowing earlier this month from Israel. Chevron Corp. restarted the Tamar natural gas platform offshore following its move to shut the field down as a precaution after Hamas attacked Israel Oct. 7.
The Adam LNG vessel loaded Nov. 21 at the Idku terminal, marking Egypt’s first cargo since Oct. 11, according to Kpler data. The country has increasingly relied on Israeli gas imports to feed its LNG exports as domestic production has declined and more feed gas has been reserved for domestic consumption.
In Asia, spot Japan-Korea Marker prices held steady near $16 on Monday. Storage inventories and supplies are also strong in the region, but some spot buying has helped support prices.
China, Pakistan, Thailand and India have all closed buy tenders for LNG over the last week or so, according to Kpler. The Panama Canal has also limited vessel transits because of a drought, forcing U.S. LNG cargoes to take longer routes to Asia or find buyers in Europe instead.
Still, additional supplies closer to the region are ramping back up. Chevron’s Gorgon LNG facility in Western Australia has resumed full production in recent days after experiencing production issues earlier this month.
The Symphonic Breeze tanker is scheduled to arrive at Shell plc’s Prelude floating LNG facility offshore Australia on Dec. 6. Kpler shows it is the first vessel flagged to arrive at the facility since August, when Shell started maintenance at the 3.6 million metric tons/year export plant.
Gazprom PJSC also said over the weekend that its Power of Siberia pipeline set a “historical record for daily gas supplies to China,” where cold weather is stoking energy demand.
Meanwhile, prices in the United States fell again on Monday after forecasts trended warmer and domestic gas production continued to surge.
Weather models late last week had trended colder for the back half of the 15-day outlook period, but they reversed warmer over the weekend, according to NatGasWeather.
Booming daily production numbers showed no signs of letting up over the holiday and indeed even appeared to reach a new high watermark.
Daily production estimates from Wood Mackenzie reached 106.0 Bcf/d on Thanksgiving and Black Friday before dropping back to 104.2 Bcf/d for Monday. The firm estimated a recent seven-day average for domestic production of 105.1 Bcf/d.
After settling 4.2 cents lower on Black Friday, the December Henry Hub contract plunged below $3 on Monday. The drop also came as LNG feed gas demand remains near highs of 15 Bcf/d.
NGI’s Weekly Spot Gas National Avg. for the Nov. 20-22 period also fell 2.0 cents to $2.850. The trading week was cut short to three days by the holiday.
