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Weekly Gas Market Analysis Report

CW 23

  • European natural gas prices initially declined last week on a headline from news outlet Axios regarding an imminent 60-day memorandum of understanding (MOU) to extend the ceasefire. This week, however, prices moved higher again as positive sentiment dissipated. Peace talks between the US and Iran show little progress, and US and Iran launched fresh strikes.
    • Iranian media reported that Tehran had suspended communications with Washington in response to Israeli strikes in Lebanon. US insisted the talks are ongoing. On Monday, Donald Trump has said Hezbollah and Israel have agreed to mutual de-escalation, only for fresh Israeli strikes on Lebanon launching next day.
  • Fundamentally, this week, the market has gotten a little tighter. This is occurring despite lower demand, as the first heatwave of the year across northwestern Europe is behind us and this week sees cooler, rainier, windier weather. On the supply side, LNG sendout deteriorated, partly on planned maintenance. In the East, planned maintenance is currently affecting Turkstream deliveries.
  • Norwegian flows are currently underperforming on unplanned and prolonged maintenance. There is also a possibility of Norway strikes, even if the scope is likely limited: Norwegian offshore oil workers' wage negotiations are due to enter mediation on 3–4 June, with strike action possible if no agreement is reached.
  • Another week, another rally, another record highs on stock markets. The US S&P 500 topped 7,600 index points, Japaneses Nikkei 225 moved above 68,000. The upward move continues to be supported by tech stocks, on intensifying demand for AI shares. Geopolitical development has less of an influence on stocksthese days.
  • Oil prices have been reacting closely to Iran-US developments, first moving lower at the end of last week, only to recover this week, on stalled progress, renewed hostilities. The IEA warned that global oil inventories could hit critical levels ahead of the peak summer demand period
  • Carbon prices rose strongly over the past week. The impact of earlier heat on cooling demand, and reported nuclear reductions in France all supported carbon. With an increase in carbon prices and steady and high coal prices, we have seen power prices also moving up.
  • JKM prices moved up last week on the front, but moved lower for Sep, Q4. Prices have been reacting to (lack of) hopes of a possible deal between US and Iran just like European prices have. On the spot, JKM is also supported by a start of strikes in Australia.
  • Another LNG cargo, from the UAE's Das Island export terminal, has transited the strait of Hormuz and was headed for India last week. That marks the 8th one since the US-Iran war began.
  • Weekly Gas Market Analysis Report CW 23

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