LNG

European and Asian liquefied natural gas prices rebounded from three-year lows as cooler weather and the return of government energy policy uncertainties offset high global storage levels and concerns over trade route insecurity.

North Asian spot LNG cargo prices fell on the week while European wholesale natural gas values also declined as full storage in the southern European Union nations of Spain and Italy and mild seasonal weather in Northwest Europe eased geopolitical supply concerns.

European and North Asian liquefied natural gas cargo and wholesale gas futures prices declined for the winter season and were flat through September as regional gas storage hit record levels exactly a year after European Union prices soared over $62 per MMBtu when Russian pipeline gas supplies were severely disrupted.

Intercontinental Exchange, the leading global provider of energy trading platforms for futures and options, reported record Open Interest across its global commodity and energy futures and options markets, including European natural gas and with record volumes also seen in oil options.

European and Asian natural gas market prices declined again with the Dutch Title Transfer Facility (TTF) benchmark falling by over 7 percent on the week to about $14.5 per million British thermal units as more LNG cargoes were pointed at Europe, though the current price was well down on the $53.8 per MMBtu that prevailed exactly a year ago after the Russian invasion of Ukraine caused chaos in already tight global gas markets.

European natural gas and LNG prices dropped by another 10 percent even as European Union gas storage levels had their biggest decrease of the winter season and the EU’s latest LNG price assessment surpassed the existing Dutch Title Transfer Facility (TTF) valuation while North Asian spot cargo prices were higher.

European Union natural gas prices and LNG values hit record levels this week and the benchmark Dutch Title Transfer facility price was still just below $60 per million British thermal units after the Russian gas dispute escalated while Asian LNG spot cargo prices also gained ground on the week, though at a slower pace than the EU market.

Nord Stream II AG, the owner of the new Russian pipeline to bring supplies to Germany, said it registered a subsidiary for the German part of the pipeline to meet German regulatory requirements, though the certification for the project still remained suspended by the Bundesnetzagentur regulator based in the city of Bonn.

Liquefied natural gas spot demand for North Asia showed little signs of declining much through the North Hemisphere winter into 2022 as overall cargo liftings rose and European gas benchmarks lost further ground compared with the Pacific Basin amid a more than 5 percent drop in crude oil prices.

The liquefied natural gas market continued to display seasonally high prices for shipments to China, Japan and South Korea as cargo liftings stayed above 100, while European benchmark LNG values slipped after previously hitting 2021 highs.