Prices increase amid US LNG supply concerns

The bulls reclaimed control of gas prices on Monday amid surging US gas futures and strength across the wider energy complex.

After falling for 4 consecutive sessions following last weeks outage-induced rally, late afternoon trade sent contracts soaring with the Winter 24 front-season contract closing to settle just short of the 100p/therm (3.4p/kWh) psychological level.

Sweltering temperatures in the Southwestern US contributed to strength on the US Henry Hub amid increased cooling-related demand in the region. Any signs that the US system is overstretched will be of great concern to European markets, with the states serving as the world’s largest LNG producer in 2023 and the number of cargoes arriving at UK ports already trailing well behind last years pace.

Pressured oil futures likely served as an additional source of support, according to data from ICE the Brent Crude benchmark contract saw day-on-day gains of 2.52%. Again, forecasts of US demand over the summer months may have spooked both the Brent (Europe) and WTI Crude (US) benchmarks.

The ebbs and flows of US oil output can have far-reaching effects due to the country’s position as the world’s largest producer of the fuel.

Natural gas prices are mainly unchanged at the NBP this morning, with most being offered not too far from their previous settlement at time of writing.

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