Europe is entering winter with its lowest gas inventory of the 2020s while Asian spot LNG trades above $30. Rystad Energy sees as many ways for prices to fall as to rise, and US prices remain cut off from the rally.
Asian spot LNG is trading above $30 per million British thermal units, yet Rystad Energy stops short of predicting a further rally for natural gas. The consultancy tells buyers to plan for a wide range of outcomes instead of one base case.
Thin European storage meets Hormuz risk
EU storage sites were 71.6% full on Nov. 11, with Germany at 58%. The International Energy Agency modeled a cold winter with continued disruption in the Strait of Hormuz and found that EU storage could fall below 10% of working capacity by the end of March, S&P Global reported.
Rystad says Europe will have to pay up to keep US cargoes from being pulled toward Asia. Asia is a less eager bidder than the price suggests, however. Rystad expects a mild winter in Northeast Asia, where LNG at $30 discourages gas burning and boosts coal use.
Price also restrains Chinese buying. Bloomberg reported that cheap domestic supply is curbing spot purchases, with the national average LNG price near $22, almost $10 below the Japan/Korea Marker.
US prices stay cut off from the rally
In the US, the Energy Information Administration's Nov. 10 outlook has Henry Hub averaging $2.87 from November through March, 16% below last month's forecast. Rystad expects a winter peak around $4.
Qatar's October exports fall short of February's
Kpler data put Qatar's October exports at just above 2.7 million tons, against nearly 6.2 million in February. S&P Global Energy tracking cited by Reuters counted 31 laden LNG tankers exiting the strait in October, up from 23 in September.
Rystad says transits stabilized in October and could allow a supply recovery by the second quarter of 2027. The IEA, however, puts cumulative LNG supply losses from 2026 to 2030 at 150 billion cubic meters, equal to 15% of new supply expected globally over that period.
Source: Oilprice.com
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