Increased US demand lifts global spot LNG pricing
Gas prices edged higher into Friday’s close, with bullish moves on the US Henry Hub near-curve helping to lift global spot LNG pricing.
A surge of arctic weather sweeping the US East Coast is adding upward pressure, as exporters may need higher LNG cargo prices to preserve margins.
The UK and EU will remain heavily dependent on spot LNG this winter, leaving both markets exposed to sudden US price shifts given America’s role as the leading supplier for the super-chilled fuel.
Relatively low storage levels is also making the market very nervous, and any disruption to the currently steady LNG supply dynamic would weigh on the short-term supply-demand balance.
Strong wind generation in the second half of last week meant gains were more contained along the baseload power curve, with some seasonal contracts closing lower when compared to their previous settlement.
According to data from Elexon, wind output rose even further on Friday, averaging at a rate of 20.4GW, 52.9% of the GB generation mix.
This kept gas-fired demand subdued at just 5.5GW (14.2%) which resulted in a slight decrease in system demand for natural gas.
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Price commentary courtesy of Crown Gas and Power 