Global natural gas prices continued to climb on Monday amid hotter weather, supply constraints and increasing competition among buyers.
The prompt Dutch Title Transfer Facility gained 4% Monday to finish just above $10/MMBtu. The contract increased by 9% last week, when the Japan-Korea Marker also climbed by 3%.
Extreme heat has gripped South and Southeast Asia in recent weeks, which has boosted spot demand and intensified competition for cargoes during the restocking season.
Bangladesh, Thailand and Vietnam closed tenders over the last week for seven cargoes combined for delivery between this month and July, according to Kpler data. India’s Gail Ltd. also has a tender open to purchase 12 cargoes for 2025 delivery.
Also impacting Asian supplies is an LNG plant outage in Western Australia. Chevron Corp. said last week a mechanical fault in a turbine knocked out one train at its Gorgon liquefied natural gas export facility.
“Repair activities have commenced and are expected to take a number of weeks,” a spokesperson told NGI. “Domestic gas and the remaining two LNG production trains at Gorgon are unaffected and are producing at full rates.”
Australia exports most of its LNG to Asia, where JKM prices were holding steady above $10 on Monday.
Ongoing outages at the Freeport LNG terminal in the United States since the beginning of the year have also kept the market tight. Freeport has slowly ramped back up over the last two weeks after feed gas flows hovered near zero. Freezing weather on the upper Texas coast in January caused issues that required repairs across all three trains.
Freeport’s feed gas nominations near 1.3 Bcf/d on Monday indicated two trains are now online at the terminal. One vessel loaded there on Friday and another was docked at the facility on Monday, according to Kpler vessel tracking data.
Maintenance in Norway and lower renewable energy output in Europe were also helping to support prices on the continent as the week got underway. Temperatures are expected to be above normal in parts of Western Europe this week, as well.
However, storage inventories on the continent remain strong at 63% of capacity. That’s well above the five-year average of 48%.
Price increases could also be tempered by a statement from Hamas, which said Monday it had accepted a ceasefire proposal to stop the seven month war in Israel, according to news media reports. But Israel had not yet commented as of Monday afternoon on the proposal that was negotiated by Qatar and Egypt.
In the United States, meanwhile, strengthening demand from Freeport and lower production were sustaining prices Monday. The June Henry Hub contract climbed 5% last week. Henry Hub added another five cents on Monday to close $2.19.
Wood Mackenzie estimates on Monday showed domestic gas production averaged 98 Bcf/d over the last week, down by more than 3 Bcf/d from year-ago levels.
Cheniere Energy Inc. also reassured the market last week, when management said during the company’s first quarter earnings call it does not expect extended maintenance outages this summer.
CEO Jack Fusco said maintenance at the company’s export plants would be spread more “strategically” across the calendar. Cheniere has already completed what Fusco described as smaller-scale and more efficient maintenance projects.
“Those will continue throughout the year, especially as we continue into the summer months, but we do not anticipate a long outage like we executed in June last year,” he said.
In other news last week, Russia’s Gazprom PJSC reported its first loss in more than 20 years. The company recorded a net loss of $6.9 billion in 2023 amid a steep decline in natural gas sales to Europe.
The continent was once Gazprom’s largest gas buyer, but the company significantly cut exports to Europe after the Kremlin ordered an invasion of Ukraine in early 2022.
