Last week we saw UK and European gas prices ease off recent highs, however this week has seen a resurgence in the bullish momentum. Once again geopolitical and supply risk appear to be the reason for the gains. The market continues to closely monitor Gaza peace talks however escalations over the weekend in the Middle East and Russia launching several waves of missile and drone attacks on Ukraine, the market has heightened their concerns. In addition to this an LNG facility in Australia, Ichthys, operated by Inpex Corp has extended an outage until October. The extension of the Ichthys LNG outage could cause stronger competition for spot LNG among Asian buyers to meet increased cooling demand with ongoing heatwaves in the region. This will mean that European and UK prices would have to further increase to compete with Asia for spot cargoes if needed in the near term. With a significant part of Norway’s annual maintenance starting this week and with multiple ongoing outages European balances may become tighter over the coming weeks.
This is a featured article.
