European natural gas prices continued climbing higher on Tuesday, lifted partly by the largest U.S. gas producer’s decision to curb output significantly this quarter.
The Title Transfer Facility (TTF) gained across the curve, with the prompt month adding another 4% to finish about a quarter shy of $9/MMBtu on Tuesday. EQT Corp.’s announcement on Monday to cut 1 Bcf/d of its U.S. gas production through the end of March helped support TTF’s momentum as it followed other commodity prices higher.
The contract gained 7% last week and another 4% on Monday. Engie EnergyScan analysts said weaker renewables output, an increase in coal and U.S. gas prices, and profit taking have pushed TTF higher in recent days.
In the United States, the April Henry Hub contract added another four cents Tuesday to finish at $1.95, building gains on Monday after EQT’s announcement. Henry Hub has been on the rise since last week as domestic production cuts are finally starting to show in supply data.
“The fundamental situation also remains somewhat bearish amid mild weather and very solid storage levels across the continent,” said trading firm Energi Danmark of the European market.
Indeed, temperatures across the northern hemisphere are trending warmer.
In Europe, that has cut into demand. Storage inventories are at 62% of capacity, compared to the five-year average for this time of year of 45%. The lack of demand and robust supply should aid restocking efforts this summer and help keep Europe on track to again fill inventories before next winter, according to Bloomberg New Energy Finance analysts.
European Union member states also have agreed to again cut gas demand by 15% until March 31, 2025, in an effort to strengthen energy security. The agreement continues measures put in place after Russia invaded Ukraine in 2022 and cut off gas exports to Europe.
In Asia, prices remain subdued amid seasonal temperatures and high storage inventories. Both futures and spot prices are trading near $8. The last time prices were this low was in 2021.
A bevy of spot buyers have returned to the market to secure cargoes before prices rise. Buyers in India, Japan, the Philippines, South Korea, Thailand and Vietnam all have issued tenders recently, according to Kpler.
Meanwhile, China’s LNG imports in February hit the highest level ever for that month at 5.82 million tons, according to Kpler. That’s up 17% from the same time last year as more buyers from the country sought additional cargoes in the spot market.
Chinese officials also unveiled a series of measures to further stimulate the economy this week and have set the country’s annual growth rate at 5%, which could stoke further energy demand.
In other news over the last week, Tellurian Inc. said it would not renew CEO Octavio Simoes contract when it expires in June amid ongoing management changes at the company.
Tellurian has struggled to move forward with its 27 million metric tons/year (mmty) Driftwood liquefied natural gas facility proposed for Louisiana. The company said in an update on Monday that it expects to reach a final investment decision (FID) on trains 1 and 2 this year.
Commonwealth LNG, another project proposed for Louisiana that’s working toward sanctioning, also confirmed that it would delay an FID on its 9.3 mmty plant until next year.
The company has been impacted by the Biden administration’s decision to pause approvals for new export licenses. While Commonwealth has approval from the Federal Energy Regulatory Commission, it is still waiting for an export license amid the pause, and cannot move forward without it.
Overseas, three of the Philippines’ leading energy companies have partnered to bring more LNG into the country.
Aboitiz Power Corp. and a subsidiary of Manila Electric Co. have agreed to invest in two new gas-fired power plants owned by San Miguel Corp. The three companies plan to acquire an import and regasification terminal for the LNG needed to fire the plants.
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