Gas in Europe increases by 20%, as a result of the decline in US exports
Natural gas futures in Europe soar 20% to surpass €28.5 per megawatt-hour after hitting a two-year low last week below €23 on reduced direct gas supply towards the EU.
US exports of liquefied natural gas (LNG) fell to 7.66 million tons in May from a record 8.01 million tons in April, as maintenance at some plants limited production and weakening of prices in Europe which has reduced flows to the region, according to transport data.
US LNG exporters reduced cargoes to Europe last month, while more LNG was delivered to Asia and Latin America, partially offsetting European weakness, according to preliminary data from Refinitiv Eikon.
According to consultancy Rystad Energy, Asian LNG prices for July delivery rallied from previous declines, making US LNG more attractive to traders and oil majors with access to spot cargoes.
But in Europe, the main market for US LNG, front-month prices at the Dutch Title Transfer Facility fell, Rystad noted, creating an opportunity for buyers in other regions to buy spot US LNG cargoes.
US LNG exports to Europe fell from 71% of total exports in April to 60.5% in May, while exports to Asia rose to 14% of total shipments last month, from 12% in May. April. Data shows that LNG imports from Latin America grew to 11% in May, from 6% in April.
Meanwhile, France's Montoir LNG terminal will remain closed until June 10 due to reduced supply due to lower LNG shipments and a maintenance outage. In addition, the Turkstream pipeline, which transports gas from Russia to Turkey via the Black Sea, is suspended until June 12 for maintenance work. Finally, Saudi Arabia's decision to implement significant cuts in oil production starting in July could put pressure on long-term contracts, often linked to oil prices.
So the abundance of gas that had brought down prices to their lowest levels is a little less abundant and those who have relied only on spot gas prices risk getting burned again. It seems true that experience teaches nothing…
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The article Gas in Europe increases by 20%, as a consequence of the drop in US exports comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-gas-in-europa-aumenta-del-20-come-conseguenza-del-calo-dellexport-usa/ on Mon, 05 Jun 2023 16:17:52 +0000.