Prices up amid renewed LNG supply risks
Gas prices continued their upward trajectory on Monday as ongoing Norwegian maintenance and renewed LNG supply risks combined to support prices.
Bullish sentiment was most pronounced at the front-end, with the October 24 front-month contract advancing more than 1.7p/therm (0.06p/kWh) above its previous close as short-term risks continued to spook European gas hubs ahead of winter.
Widespread Norwegian capacity restrictions continued to serve as an underlying source of support; data from offshore operator Gassco shows that 175.38mcm of supply was removed yesterday due to seasonal maintenance. Subsequently, Norwegian export flows into Great Britain’s Easington and St Fergus terminals were nominated at just 5.5% of nameplate capacity.
Further support may have emerged from news of a major storm system in the Gulf of Mexico. Tropical Storm Francine is expected to strengthen into a Category 2 Hurricane early on Wednesday. This has once again put oil and gas export infrastructure across the US East Coast on high alert as was seen with Hurricane Beryl back in July and some operators have already halted production at key assets.
Little movement has been observed so far this morning, with both the front-month and front-season contracts currently being offered very much in line when compared to their previous settlements, at time of writing.
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Price commentary courtesy of Crown Gas and Power 