Europe’s benchmark natural gas prices slumped on Monday to the lowest level in one week after the U.S. export facility Freeport LNG resumed some operations following a shutdown due to Hurricane Beryl earlier this month.
The Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, were down by 2.7% at $34.09 (31.31 euros) per megawatt-hour (MWh) at 10:54 a.m. in Amsterdam on Monday.
Last week, the supply disruptions from Freeport LNG and heat waves across a large part of Europe pushed up European natural gas prices.
At the start of this week, supply concerns abated and the TTF price slid in Monday trading.
The Axios II LNG vessel has arrived at Freeport, indicating that the U.S. export plant has resumed operation, per ICIS cargo-tracking data cited by Tom Marzec-Manser, Head of Gas Analytics at ICIS.
Freeport LNG last loaded a cargo on July 5, before being taken offline ahead of the landfall of Hurricane Beryl.
The latest development in LNG supply and European prices shows the vulnerability of Europe’s benchmark prices to supply outages.
Similar was the case in early June, when a sudden supply outage at an offshore connection hub for pipelines in Norway pushed Europe’s prices soaring to their highest level in six months.
In the aftermath of Hurricane Beryl, which made landfall in Texas in early July, at least 10 cargoes are said to have been canceled from the Freeport LNG export facility.
Fear of insufficient supply “is still ingrained in the market even though at present there is enough supply to go by,” Florence Schmit, an energy strategist at Rabobank, told Bloomberg on Monday, commenting on the recent price moves in European natural gas prices.
Europe’s natural gas storage sites are already 82.5% full, per data from Gas Infrastructure Europe as of July 20.
At current supply and demand dynamics, the EU will easily manage to fill its storage sites well ahead of the winter heating season, analysts say.
ADVERTISEMENT
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
- Middle East Tensions Rise With Houthis-Israel Standoff
- How the U.S. Presidential Election Could Influence Precious Metals Prices
- Copper Demand Surge Drives Consolidation Wave in Mining Sector
