European natural gas prices headed for a weekly loss as mild weather caps demand and a key LNG-export facility in the US prepares to resume some shipping.
(Bloomberg) — European natural gas prices headed for a weekly loss as mild weather caps demand and a key LNG-export facility in the US prepares to resume some shipping.
Benchmark futures are set for a weekly decline of about 7%, even as prices advanced Friday amid an outage in Norway. The prospect of warmer temperatures and additional supplies is helping to ease Europe’s energy crisis as the last stretch of winter approaches.
The Freeport LNG export plant in Texas — shut after a fire in June — has told customers it plans to resume some shipments on Saturday, according to people with direct knowledge of the matter. A total restart of the facility requires further regulatory approvals.
US liquefied natural supplies have been vital for Europe to replace Russian energy and to build stockpiles. Gas inventories in the region are 68% full, well above the five-year seasonal average. That’s helped to push futures about 30% lower since the start of the year.
“Prices have fallen as risk premium faded due to healthy gas storage levels in Europe driven by weaker demand and strong LNG inflows,” Deepa Venkateswaran, an analyst at Sanford C Bernstein & Co., said in a note.
To fill the gas supply-demand gap left by Russian exports cuts, the region will have to “attract even higher levels of LNG on top of the record level of imports in 2022,” she added. Europe is building new import terminals, with the region’s regasification capacity expected to increase by 19% by the end of 2023, according to the researcher.
The market remains sensitive to any risks of tightening. Norway’s network operator Gassco announced an unplanned outage at the giant Troll field due to process problems. It’s currently expected to last until Saturday, but the exact duration is uncertain.
Dutch front-month gas, Europe’s benchmark, increased 2.5% to €54.05 a megawatt-hour by 10:35 a.m. in Amsterdam. The UK equivalent also rose. German power for next-month advanced by 3.2%.
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