Home » Posts tagged 'natural gas prices'

Tag Archives: natural gas prices

European natural gas prices have plunged to pre-Ukraine invasion levels on mild winter. Heating demand across the EU has declined, allowing fuel storage tanks to continue injections and remain above seasonal levels. This bodes well for the energy-stricken continent, but new weather forecasts suggest a late-month return to winter.

The benchmark Dutch TTF futures contract for February was down to 65.80 euros a megawatt-hour or more than 6% on the session. On the eve of Russia’s invasion last February, the contract sold for about 88 euros.

Several factors have allowed the EU to skirt around an energy crisis, including alternatives to Russian NatGas, such as increased imports of US LNG, widespread conservation efforts for residential and business customers, and a very mild winter.

NatGas stockpiles across the continent are well above a 12-year mean for this time of the year. The percentage of NatGas full has yet to fall from around 83% since Christmas.

Meanwhile, new weather models are pointing to a possible flip back to colder temperatures next week for parts of Europe. Natgas traders will be focused on the severity of the cold and the impacts on heating demand.

The return of wintry conditions follows a record-warm start to the year, which provided relief from an energy crunch that has hammered Europe for months. The mild weather curbed demand for heating, allowing some countries to top up natural gas stockpiles at a time when they’d usually be tapping supplies.

Most of Britain will see below-average temperatures by the end of next week, with snow possible in northern areas, according to the country’s Met Office. –Bloomberg

A few models show the possible cold snap for parts of the EU next week.

Colder temperatures could be arriving in North West EU in days.

…click on the above link to read the rest…

Global NatGas Prices Sink As Warm Weather Spreads

January 3, 2023

Global NatGas Prices Sink As Warm Weather Spreads

US and European natural gas prices are sliding as warmer weather reduces demand for the heating fuel, and storage levels remain high. Risks of a global energy crisis are diminishing for now — well — that’s until the next cold blast strikes.

The polar vortex that sent much of the Lower 48 into a deep freeze at the end of 2022 ended last week. Now, much of the US will see warmer-than-normal temperatures through mid-Jan.

The National Oceanic and Atmospheric Administration’s latest 6-10 Day Temperature Outlook shows that nearly all Lower 48 will experience above-average weather.

NOAA’s 8-14 Day Temperature Outlook suggests the same.

Weather data via Bloomberg shows Lower 48 temperatures are expected to remain above a 30-year average through mid-month.

And this will reduce heating demand.

US NatGas storage entered into a drawing period in mid-Nov. and has been sliding since.

A weaker heating demand outlook has sent US NatGas prices down nearly 9% to $4.062 per million British thermal units on the New York Mercantile Exchange in early Tuesday trading. Prices are back to levels not seen since early February 2022.

Across the Atlantic, EU NatGas touched the lowest levels since the start of the Ukraine war.

“The risk of extreme market tightness that people were worried about before the winter started seems low now,” BloombergNEF’s Abhishek Rohatgi wrote.

Warmer weather in Europe has eased concerns about blackouts and rationing as stockpiles increase:

In fact, Europe has been able to add more gas into storage in the last few days amid a mix of curbed heating needs and typically lower consumption during the holiday season. -Bloomberg

EU NatGas storage increased last week.

Temperatures across Central EU are expected to hold above seasonal levels through at least the mid-month.

Sign of relief worldwide: NatGas prices slide in the US, EU, and Asia.

…click on the above link to read the rest…

Gas Levy Could Triple Household Heating Bills In Germany

July 30, 2022

Gas Levy Could Triple Household Heating Bills In Germany

Germany plans to introduce a levy for all its gas consumers beginning in October as the government looks to avoid a wave of collapsing gas-importing and gas-trading companies amid record-high natural gas prices, a new bill seen by Reuters showed on Thursday.

Russia is further reducing flows via Nord Stream this week, to just 20% of the pipeline’s capacity, days after restarting the link at 40% capacity after regular maintenance.

The German government has already intervened to rescue energy group Uniper, Russia’s single largest gas buyer in Germany. Uniper—and many other German gas traders and suppliers—have been reeling from reduced Russian supply and soaring prices of non-Russian gas. Germany and Uniper agreed last week on a $15 billion bailout package, including the German government taking a 30-percent stake in the company and making more liquidity and credit lines available to the group.

Under the plans of the government, all consumers of gas, including households, will have to pay an additional levy, which will go to support Germany’s gas importing companies, which struggle with a lack of Russian gas and sky-high prices of non-Russian alternatives. The details of the bill are set to be announced next month.

Households and industrial consumers are expected to pay the levy through September 2024, according to the draft Reuters has seen.

“One doesn’t know exactly how much (gas) will cost in November, but the bitter news is that it’s definitely a few hundred euros per household,” German Economy Minister Robert Habeck was quoted by Reuters as saying on Thursday.

Marcel Fratzscher, president of DIW, the German Institute for Economic Research, told Düsseldorf’s Rheinischen Post newspaper that German households should prepare for at least tripled costs of heating on gas. The levy should be accompanied by a relief package for lower-income households, otherwise the new charge could lead to a “social catastrophe,” Fratzscher added.

European LNG Imports Hit Two-Year High As US Flotilla Delivers Much-Needed Supplies

January 11, 2022

European LNG Imports Hit Two-Year High As US Flotilla Delivers Much-Needed Supplies

A flotilla of liquefied natural gas (LNG) from the US has finally arrived in Europe, increasing LNG imports on the fuel-starved continent to a two-year high. The fresh injection of natural gas is helping to offset declining Russian shipments. Prices of European natural gas fell Monday.

Data compiled by Bloomberg shows LNG gas imports in northwest Europe jumped to their highest levels since December 2019. The supply comes from a flotilla of up to 20 LNG vessels from the US that began their sailings in mid/late December.

Fresh supplies of LNG are helping to ease supply woes but will not solve the energy crisis on the fuel-starved continent this winter because stockpiles are at very low levels for this time of year. News of fresh supplies is temporary relief and has resulted in front-month Dutch gas futures falling as much as 6% to 82.50 euros a megawatt-hour and traded at 88 euros around 0600 ET.

Since mid-December, European gas prices have been halved from about 182 euros to 88 euros today. The downdraft is primarily due to the prospects of the flotilla.

Notably, there is still a significant arbitrage spread between US and EU Nattie prices over and above historical norms…

Here’s our reporting on the new supplies:

“With the peak of winter still ahead, we see a wide range of potential near-term price outcomes and expect elevated volatility to persist,” Morgan Stanley wrote in a commodity note.

…click on the above link to read the rest of the article…

The Energy Crisis is Here – What’s Coming Next?

January 8, 2022

The Energy Crisis is Here – What’s Coming Next?

“Europe’s Energy Crunch Sparks Panic in Asia and Dash to Buy Fuel”
Bloomberg, September 16, 2021

“Europe’s Energy Crisis Is Coming for the Rest of the World, Too”
Bloomberg, September 27, 2021

“European Energy Prices Surge to Records as Supply Crisis Spreads”
Bloomberg, September 28, 2021

First appeared in our Q3 2021 commentary

The energy crisis unfolding across Europe, Asia, and South America caught almost everybody by surprise – but not our readers, we hope. Our Q2 2020 Natural Resource Market Commentary was titled “On the Verge of an Energy Crisis.” Fast forward 14 months: the energy crisis we predicted has arrived with a vengeance.

Yet, we assumed the energy crisis would first hit global crude markets and then spill over into natural gas. Instead, the opposite has occurred: tightness in global gas markets is now impacting crude.

We thought extremely strong oil demand, coupled with a feeble rebound in non-OPEC production, would lead to a situation never seen in 160 years of crude history: demand would actually surpass global pumping capability by the end of 2022. Even during the two energy crises of the 1970s (the Arab oil embargo of 1973 and the Iranian hostage crisis of 1979), crude demand did not come close to exceeding global pumping capability. Recent data strongly suggests our modelling was correct: demand will exceed pumping capacity by the end of next year.

In retrospect, we know that natural gas markets, not oil markets, were the first to slip into severe deficit (we should point that we were also extremely bullish on gas, and we maintained strong exposure to natural gas investments as well). Low inventory levels, extremely strong demand, and disappointing output from renewable sources (primarily wind and hydro), have caused European and Asian natural gas prices to soar.

…click on the above link to read the rest of the article…

Gas Prices In Europe Are Soaring Again Amid New Cold Snap

January 7, 2022

Gas Prices In Europe Are Soaring Again Amid New Cold Snap

European benchmark natural gas prices rose on Wednesday for the third day in a row, as gas deliveries from Russia via Ukraine and Poland continue to be low while another cold snap is headed to Europe.

On Wednesday, natural gas prices at the Dutch TTF hub, the benchmark for European gas, rose by 6 percent by mid-day, following a 30-percent jump on Tuesday.

European gas prices reflect growing concerns that Russian natural gas flows to Europe via Ukraine and Poland have been abnormally low in recent days.

Russian gas supply to Europe via Ukraine dropped earlier this week to the lowest daily volume since January 2020. Daily gas transit flows from Russia westward to Europe via Ukraine on Monday were half the amount Russia had booked for that day, Sergiy Makogon, chief executive officer at Ukraine’s transmission system operator Gas TSO wrote on Facebook on Tuesday, adding that the drop in transit gas volumes was expected to continue. This is the lowest transit volume of gas Russia has sent via Ukraine since January 2020, Makogon said.

Ukraine has accused Russia of deliberately withholding gas supplies to Europe during the winter months to try to force an approval of the controversial Gazprom-led gas pipeline project Nord Stream 2.

At the end of December, Ukraine’s transmission system operator sent a letter to the German Ministry of Economy, in which it says, “we firmly believe that Nord Stream 2 endangers the security of the European Union’s gas supply.”

Nord Stream 2 awaits approval in Germany and then a review from the EU, which will likely push the in-service date of the pipeline well beyond the current winter heating season in Europe.

…click on the above link to read the rest of the article…

Germany “Imperils” Power Grid By Pulling Plug On 3 Nuclear Plants

January 3, 2022

Germany “Imperils” Power Grid By Pulling Plug On 3 Nuclear Plants

As nat gas prices surge in Europe, Germany is kicking off the new year by moving ahead with plans to shutter three of its six remaining nuclear power plants, making good on a commitment made in the aftermath of Japan’s disastrous meltdown at the Fukushima Daiichi plant.

The decision was championed especially vigorously by the Greens, who are now helping to rule as part of Germany’s new “stop sign” ruling coalition. But soaring natural gas prices across Europe mean this concession to the environmental lobby couldn’t come at a worse time.

Above: One of the shuttered plants, located in Gundremmingen. Source: Reuters

It’s a decision that could have consequences for the US. As we have complained before, the AOC-backed “Green New Deal” mostly excluded nuclear, by far the most efficient and useful alternative to fossil fuels, instead choosing to rely solely on inadequate “renewables”. And as Reuters adds in its report, Germany’s decision to pull the plug represent an “irreversible” pivot away from an energy source deemed “clean and cheap by some.”

Here’s more from Reuters:

Germany has pulled the plug on three of its last six nuclear power stations as it moves towards completing its withdrawal from nuclear power as it turns its focus to renewables.

The government decided to speed up the phasing out of nuclear power following Japan’s Fukushima reactor meltdown in 2011 when an earthquake and tsunami destroyed the coastal plant in the world’s worst nuclear disaster since Chernobyl in 1986.

The reactors of Brokdorf, Grohnde and Gundremmingen C, run by utilities E.ON and RWE shut down late on Friday after three and half decades in operation.

…click on the above link to read the rest of the article…

European Firms Warn “Unbearably High Energy Costs” May Spark Wave Of Production Shutdowns

December 23, 2021

European Firms Warn “Unbearably High Energy Costs” May Spark Wave Of Production Shutdowns

Years of mindless green energy policies across the European continent are about to unleash an economic crisis. Energy-intensive companies are paying “unbearably high energy prices” that may force them to shutter operations.

Eleven European associations (from steel to fertilizers to cement to paper mills) published a press release Wednesday that warned the energy crisis that plagues the continent has worsened over the few months and accelerated in the last several days as European natural gas hit a record high on Tuesday.

“The main reasons for this situation are the financial market speculation from financial players including hedge funds and commodity trading houses, the imbalances in the gas market, seasonally decreased renewable energy production, reduced nuclear energy production, coal mine closures, and increased carbon costs passed on in electricity prices,” the eleven associations said in a press release.

Europe’s energy crisis has snowballed into what could be an economic downturn. The groups warned, “numerous industrial energy consumers” have “to curtail and/or temporarily close plants” because “energy prices have increased 4 to 5 times” and made the cost of operating uneconomical.

“The ongoing situation has severely impacted the competitiveness and profitability of energy-intensive sectors’ European operations as they are most exposed to dramatic price spikes,” the groups continued.

They said, “a prolonged period of unbearably high energy prices could lead to severe losses, relocation of European companies and an increase of carbon leakage.”

The groups called on European leaders to combat the energy crisis and “quickly exploit the full potential of the toolbox presented by the European Commission in October. Furthermore, urgent actions are necessary at EU level to enable affected companies to overcome this situation.”

…click on the above link to read the rest of the article…

UK Natural Gas Prices Hit New High, Trigger “Marketwide Crisis”

December 22, 2021

UK Natural Gas Prices Hit New High, Trigger “Marketwide Crisis”

Update (1120ET): The latest jump in U.K. natural gas prices has been called a “national crisis” by multiple energy firms and industry groups in the country. They’re requesting the government protect customers and suppliers as critical Russian gas flows into Europe plunge, nuclear outages in France, and cold weather send gas prices to stratospheric levels.

On Tuesday, U.K. wholesale natural gas prices hit a new record high of 470p per therm (intraday). Prices have since eased to 451p per therm.

FT spoke with London-listed Good Energy, EDF Energy, and the trade body Energy U.K. about the alarming situation in the country as the winter in the Northern Hemisphere begins.

“This is a national crisis. Wholesale gas and power prices have increased to unprecedented levels over the last three weeks, creating an extremely difficult operating environment for every business in the industry,” said Nigel Pocklington, CEO of Good Energy, a small renewable energy supplier.

EDF Energy, the fourth-largest supplier in Britain, said high natgas prices are sending power prices skyrocketing, and it’s “critical” for the government to “act now to support energy customers.”

Emma Pinchbeck, chief executive of Energy U.K., said Britain faces “a marketwide crisis.”

“Other Treasuries in Europe have already responded to the crisis, but in the U.K., the energy sector is still asking if the chancellor knows that energy bills going up by over 50 percent in the new year is a problem for ordinary people, businesses, and the economy,” Pinchbeck added.

U.K. lawmakers are in panic mode to protect households by possibly capping power bills. The same is true for other politicians across Europe.

Where there is a crisis, there is always a huge opportunity. We explained yesterday, in a note titled “Commodity Traders Find Huge Arbitrage Opportunity As LNG Ships Head For Europe,” that extraordinary high European premium on gas has made it an arb trade of a lifetime.

…click on the above link to read the rest of the article…

Entice and Orbit become latest energy firms to go bust

December 18, 2021

Entice and Orbit become latest energy firms to go bust

Two more energy suppliers have gone bust amid the surge in gas prices, the regulator Ofgem has said.

Entice Energy and Orbit Energy, which have about 5,400 and 65,000 customers respectively, ceased trading on Wednesday.

The two firms are the latest companies to go under as higher wholesale gas prices have made price promises by suppliers to customers undeliverable.

Ofgem said new suppliers would be found for the two companies’ customers.

Households have been advised to wait until a new supplier is appointed before thinking about switching company.

Neil Lawrence, director of retail at Ofgem, said:  ”I want to reassure affected customers that they do not need to worry:  under our safety net we’ll make sure your energy supplies continue. ”

Orbit said energy supplies to its customers were “secure” and said any credit balances would be honoured.

The collapse of Orbit and Entice comes after Bulb, the UK’s seventh largest energy supplier, was handed about £1,000 per customer from the UK government to enable it to continue supplying energy.

Bulb, which has 1.7 million customers, is the largest company to date to face difficulties in recent months and was put into special administration, which will allow it keep trading for the moment with a £1.7bn loan.

It will be run by an administrator until a buyer can be found or until its customers have moved.

Bulb’s size is the reason it has been kept afloat by the government, rather than its customers being transferred to other suppliers, as has happened with other failing energy providers.

Since the beginning of September, a total of 24 energy suppliers have now failed following a spike in gas prices.

…click on the above link to read the rest of the article…

The European Energy Crisis Is About To Go Global

September 24, 2021

The European Energy Crisis Is About To Go Global

It was only a matter of time, really. In a globalized world, energy crunches can hardly remain regionally contained for very long, especially in a context of damaged supply chains and a rush to cut investment in fossil fuels. The energy crunch that began in Europe earlier this month may now be on its way to America. For now, all is well with one of the world’s top gas producers. U.S. gas exporters have enjoyed a solid increase in demand from Asia and Europe as the recovery in economic activity pushed demand for electricity higher. According to a recent Financial Times report, there is a veritable bidding war for U.S. cargos of liquefied natural gas between Asian and European buyers—and the Asians are winning.

Coal exports are on the rise, too, and have been for a while now, especially after a political spat had China shun Australian coal. But supply is tightening, Argus reported earlier this month. In July, according to the report, U.S. coking coal exports dropped by as much as 20.3 percent from June. The report noted supply was constrained by producers’ limited access to funding and a labor shortage that has plagued many industries amid the pandemic.

All this should be good news for U.S. producers of fossil fuels. But it may easily become bad news as winter approaches. The Wall Street Journal’s Jinjoo Lee wrote earlier this week high energy prices could be the next hot import for the United States. Lee cited data showing gas inventory replenishment was running below average rates for this season, and gas in storage in early September was 7.4 percent below the five-year average.

…click on the above link to read the rest of the article…

UK Tells People To Stop “Panic Buying” As “Winter Of Discontent” Fears Emerge

September 24, 2021

UK Tells People To Stop “Panic Buying” As “Winter Of Discontent” Fears Emerge

UK politicians are in utter panic as similarities to the 1970s-style “winter of discontent” of shortages and socio-economic distress could rear its ugly head in the coming months, according to Reuters.

A significant driver in what could very well be a hellacious winter for Brits is soaring natural gas and electricity prices that have already disrupted segments of the UK economy and sent shockwaves through energy markets, chemical producers, and the food industry, among others. Compound this all with labor shortages thanks to Brexit, and the dire situation may worsen.

Some Brits who remember the past worry a winter of discontent could be imminent. Many are facing extraordinary high power bills and sharp food inflation that are eating away at wages, along with shortages of goods at supermarkets.

The primary driver of this chaos is soaring natural gas prices due to declines in Russian flows to Europe, along with a drop in renewable power output. The soaring cost of natgas has pressured chemical firms that use the gas in production to limit or halt operations. One such industry is fertilizer that is a byproduct of natgas. From there, the decline of fertilizer has affected CO2 production, which heavily impacts food supply chains.

People are paying attention to the developments of the energy crisis and its immediate ripple effect across the economy and are taking no chances of being left without food. Many are panic buying food as government officials try to calm everyone down, reassuring everyone the winter of discontent is not upon them.

“There is no need for people to go out and panic buy,” Small Business Minister Paul Scully told Times Radio.

…click on the above link to read the rest of the article…

Winter Blast To Dump Heavy Snow Across Rockies, Plains, Midwest This Week

October 29, 2019

Winter Blast To Dump Heavy Snow Across Rockies, Plains, Midwest This Week

Several major snowstorms are expected to dump heavy snow across the Rockies, the Plains, and into the Midwest this week as cold Arctic air blankets those regions in the last days of October.

The potential for cold into November? It’s complicated.

In today’s midday updates, we break down the importance of high latitude blocking and what we can expect in a critical month ahead. http://empireweather.com #natgas #energy #agwx

The Weather Channel is reporting “a southward plunge of the jet stream from the Rockies into the central US has entrenched a pipeline of arctic air over those regions. Two weather systems tapping into that cold air are producing snowfall as they track from the Rockies to the Plains and into Midwest.”

The National Weather Service (NWS) has issued winter weather alerts across the northern and central Rockies and central High Plains.

Denver-Boulder corridor, located in northern Colorado, has been placed under a winter storm warning through Wednesday morning. The region could see 6 to 12 inches of snow on through Tuesday night.

From Tuesday evening into Wednesday, snow will be seen in the Central Plains, Midwest, and the Rockies.

The Weather Channel said an area of low pressure will form near the Great Lakes on Thursday, could produce the first accumulating snow for northeastern Missouri into eastern Iowa, western and northern Illinois, and southern Wisconsin.

With a plunge in the jetstream, Central and Midwest heating degree day (HDD) indexes, a measurement designed to quantify the demand for heating a building, have moved above trend through the end of the month into the first week of November.

A similar pattern in HDD is also seen in the lower-48, suggests that energy demand is increasing as the winter season begins.

…click on the above link to read the rest of the article…

Europe’s Natural Gas Prices Surge To Record For Summer Season

August 27, 2018

Europe’s Natural Gas Prices Surge To Record For Summer Season

Europe’s natural gas market is the most bullish it has been in years, as higher-than-expected summer demand and a tighter market drive natural gas price futures to levels last seen during this past winter’s supply crunch and to the highest for a summer season.

Natural gas prices are expected to stay strong and may still have room to rally, ahead of the next winter heating season in Europe that begins in October, analysts and traders tell Bloomberg.

Contrary to the typical summer lull in Europe’s gas prices, this year the front-month gas price in the UK—Europe’s biggest gas market—for example, is nearing the winter price from December 2017 when a deadly explosion in Austria’s gas hub at Baumgarten squeezed supplies throughout Europe. Immediately after the explosion, the price of gas for immediate delivery in the UK reached its highest level since 2013.

The past winter season in Europe was one of the coldest this decade, sending gas demand soaring and the level of natural gas stored in tanks across Europe dropping to below average levels.

Russia—which already supplies around one-third of Europe’s gas—boosted deliveries in the winter, and continued to ship higher volumes even after that, as gas importing countries were replenishing gas storage supplies that had been drained amid the cold snaps.

Come spring, demand in Europe stayed high. First, because gas storage levels were low, and second—because some of Europe’s other traditional gas-supplying countries decreased supplies over issues or maintenance at facilities.

Then summer came and with it a prolonged scorching heat wave across most of Europe for most of July and August. Demand for gas jumped again amid a tighter market and spot cargoes of liquefied natural gas (LNG) going mostly to Asia—China in particular—as sellers profit from selling their LNG on the Asian market where prices are higher than Europe’s.

…click on the above link to read the rest of the article…

UK Gas Crisis: Out Of The Frying Pan Into The Fire

March 14, 2018

UK Gas Crisis: Out Of The Frying Pan Into The Fire

For the ministers and officials assembled, it was an embarrassment all around.

Late last week, as we were at the annual Windsor Energy Consultation (WEC) just outside London, British Gas Plc confirmed that the nation was facing a natural gas shortage as freezing temperatures grip the country.

You see, blizzards, strong winds, drifting snow, and bitter cold recently brought Britain to a standstill as the weather system nicknamed the “Beast from the East” combined with winter storm “Emma” to create some of the most testing weather the U.K. has had to face in years.

Now, I can attest first hand that this cold snap was not something to take lightly.

As a regular attendee of the Windsor Energy Consultation over the past decade, a visit that includes spending three days each year at the royal residence, I know that Windsor Castle can be drafty in any weather.

But this time around, it was positively frigid.

“Frosty” Windsor Castle grounds (St. George’s Chapel on the left), March 2, 2018; photo: Bill Arnold

And nationwide, this “big freeze” has brought to light a very serious problem.

And it’s one that is only getting worse…

Bitter Cold Adds (Further) Fuel to the Flames

The unfolding gas crisis has brought about a renewed immediacy to a major political issue that has been percolating in the U.K. for some time now.

You see, for the third year in a row, a portion of my two briefings (one to the plenary meeting; one to the ambassadors), was devoted to the growing global need for a new “energy balance.”

Simply put, that balance involves two related advances.

The first is an expansion in the number of reliable (and distinct) energy sources. The second addresses the extent to which these sources provide a genuine interchangeable network of availability from such sources.

The rise of renewable sources (solar, wind, biofuel, even geothermal) has been the most visible manifestation of the developing balance. But the crucial element to remember is the balance nature of it all.

…click on the above link to read the rest of the article…

Tag Archives: natural gas prices

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

Post navigation

Latest Posts