For the Quarter Ending September 2024
North America
The third quarter of 2024 in the North American region witnessed uneven pricing dynamics in natural gas. During the first half of Q3, U.S. natural gas prices experienced a significant decline due to several factors. A surplus in natural gas storage marked seven consecutive weeks of reductions, driven by strong demand from gas-fired power generation and production cuts. Despite increased consumption in the power sector resulting from extreme summer heat, bearish pressures emerged from lower LNG exports, particularly after Hurricane Beryl disrupted operations. Total supply rose, with dry production and net imports from Canada increasing, while storage injections exceeded both last year's levels and the five-year average. Market sentiment remained cautious, with hedge funds holding long positions that indicated mixed outlooks. Although domestic production was projected to reach record levels, cooler temperatures and ongoing weather uncertainties added further pressure on prices.
In the second half of Q3 2024, the North American natural gas market witnessed a notable shift in pricing dynamics, characterized by an upward trajectory. This increase in prices was primarily influenced by supply disruptions from weather-related incidents, alongside strong export demand and fluctuating consumption patterns. The market showed signs of tightening as demand surged, particularly in the power generation and industrial sectors. This rise in demand, coupled with record LNG exports and growing adoption across various sectors, supported the overall price trend.
The quarter recorded a 5% decline overall as compared to the previous quarter, but the second half saw a 2% increase compared to the first half. This price trend culminated in a quarter-ending price of USD 2,645 per MT of natural gas (USD per 1,000 MMBtu) Ex-Louisiana, marking a significant uptick. Overall, the pricing environment in Q3 2024 was characterized by volatility across the North American region.
APAC
The third quarter of 2024 in the APAC region witnessed erratic pricing dynamics in natural gas. In the first half of Q3, natural gas prices in China experienced a significant decline driven by several factors. Demand fell short of expectations, particularly as prices exceeded previous thresholds, prompting a reduction in imports. Despite an increase in domestic production, it remained insufficient to meet overall demand, highlighting ongoing challenges in the sector. Concurrently, rising European gas prices added pressure to the market, complicating supply dynamics. Additionally, lower international LNG prices created a bearish sentiment, making imports more attractive but not enough to sustain higher consumption levels. Seasonal demand fluctuations and economic uncertainties further contributed to the downward price trend. In contrast, the second half of the quarter marked a notable increase in prices. Several key factors influenced market dynamics during this period, including growing geopolitical tensions, supply constraints, and heightened global demand. Increased industrial activity, seasonal fluctuations, and strategic stockpiling efforts further contributed to the upward price trend. Within China, the market exhibited a significant hybrid pricing pattern, reflecting broader regional dynamics. The correlation between supply and demand, coupled with seasonal variations, played a pivotal role in shaping pricing trends. The quarter-on-quarter decline of 5% showed a more positive trajectory, with a 2% increase observed when comparing the first and second halves of the quarter. Closing at USD 2,645/MT of natural gas (USD/1000mmBtu) Ex-Shanghai, China exemplified the overall mixed sentiment in the natural gas pricing environment.
Europe
The third quarter of 2024 in the European region experienced a mixed pricing environment for natural gas. In the first half of Q3, prices notably increased due to various factors, including geopolitical tensions from conflicts in the Middle East and concerns about Russian gas supplies. Additionally, rising demand from regions like China and the Middle East tightened the market, influencing price dynamics. Conversely, the second half of Q3 saw natural gas prices in Germany decline significantly, supported by stable supply conditions amid ongoing geopolitical tensions near the Russian Sudzha compressor station. Robust inventory levels alleviated market anxieties, while increased wind power generation reduced the demand for gas in electricity production. A sharp drop in U.S. LNG exports coincided with a stabilization in European demand, as countries adjusted their reliance on these supplies. Traders remained vigilant, monitoring potential disruptions from tropical storms that could impact LNG exports. This market correction followed an earlier price surge, reflecting a more balanced outlook as winter approached. Germany’s commitment to energy security was underscored by efforts to diversify energy sources and expand LNG import capacity, despite ongoing concerns about future supply dynamics. The quarter saw a 15% price increase from the previous quarter, reflecting the growing pressures on supply and demand. Germany, experiencing the most significant price changes, saw a 16% increase in prices between the first and second half of the quarter. The quarter-ending price for Natural Gas in Germany stood at USD 35825/MT (Eur/1000MWh) FD-Hamburg, underlining the overall varied trajectory in pricing, driven by a combination of global factors and domestic market conditions.
MEA
The third quarter of 2024 in the Middle East region experienced mixed price fluctuations. In the first half of Q3, Saudi Arabia's natural gas prices declined due to various factors affecting supply and demand. Significant new discoveries of oil and gas fields enhanced optimism about future supply levels, while increased domestic production from new gas fields in the Eastern Province and Empty Quarter bolstered availability. Additionally, Saudi Aramco's strategic investments in gas infrastructure aimed to expand production capabilities. However, despite robust domestic consumption, the anticipated rise in demand was slightly offset by lower-than-expected summer usage and increased competition in the global market. This imbalance between heightened supply and moderated demand exerted downward pressure on prices, reflecting the challenges facing the local gas sector amid evolving market dynamics. In the second half of Q3 2024, the Middle East and Africa region saw a notable increase in natural gas prices, particularly in Saudi Arabia, which experienced significant price fluctuations. The overall upward trend was influenced by strong global demand, especially from Asia and Europe, coupled with geopolitical tensions in the Middle East, creating bullish market sentiment. Saudi Arabia's strategic investments in expanding gas infrastructure, new field discoveries, and commitments to LNG projects further fueled the price surge. Specifically, the natural gas pricing landscape in Saudi Arabia reflected a conflicted trend, while there was a slight decrease of 2% from the previous quarter, the second half of the quarter witnessed a notable 8% increase in prices. The quarter-ending price for natural gas in Saudi Arabia stood at USD 2,620 per MT (USD per 1,000 MMBtu) Ex-Riyadh, indicating an overall hybrid pricing environment.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American natural gas market experienced a pronounced rise in prices, driven by several significant factors. Foremost among these was an increase in demand for natural gas, spurred by heightened temperatures necessitating extensive use of air conditioning in residential and commercial sectors. This surge in demand was compounded by lower-than-expected storage injections and constraints in production due to maintenance activities and delays in new well completions. The burgeoning global liquefied natural gas (LNG) market also played a role, as increased exports tightened domestic supplies. Concurrently, robust industrial activity further elevated consumption levels, reinforcing the upward pressure on prices.
The USA, the epicenter of these fluctuations, saw the most substantial price changes. The overall trend exhibited a clear upswing, influenced by both seasonality and sustained industrial demand. The correlation in price changes revealed a significant interdependence between weather patterns and consumption rates, with hotter-than-average conditions substantially driving prices higher. There was a 10% increase from the previous quarter, indicative of a robust recovery trajectory.
Concluding Q2, the latest quarter-ending price for natural gas in the USA stood at USD 2837 per 1000 MMBtu, Ex-Louisiana. This consistent upward pricing trend reflects a positive yet volatile environment, with market sentiment buoyed by strong demand fundamentals and supply-side constraints. Overall, the quarter has been characterized by a positive pricing environment, driven by a confluence of demand surges and production limitations, heralding continued vigilance in managing supply and demand equilibrium.
APAC
In Q2 2024, the APAC region experienced a significant upward shift in natural gas prices, driven by a confluence of factors. Elevated demand due to economic recovery, intensified industrial activities, and seasonal weather patterns were primary catalysts. The region's dependency on natural gas for power generation and industrial processes, coupled with limited domestic production capabilities and geopolitical tensions affecting global LNG supplies, further exacerbated the price increases. In particular, the ongoing energy transition towards cleaner fuels saw a robust pivot to natural gas, as industries endeavored to reduce carbon emissions. Focusing on China, which witnessed the most pronounced price changes, a combination of industrial replenishment, heightened summer energy demand, and constrained supply dynamics pushed prices upward. The Q2 showcased a 10% increase from Q1 2024. Seasonality played a crucial role, with the first half of the quarter experiencing moderate demand, which surged by 44% in the latter half due to intensified industrial activity and a rise in cooling needs as temperatures soared. These market dynamics culminated in a quarter-ending price of USD 2837 per1000 MMBtu of Natural Gas, Ex-Shanghai. Overall, the pricing environment in Q2 2024 was markedly positive, underpinned by substantial demand growth and supply constraints. The continual increase in natural gas prices highlights the region's ongoing challenges in balancing demand with supply, amid a backdrop of economic recovery and energy transition efforts.
Europe
In the second quarter of 2024, the European natural gas market experienced significant upward pricing momentum, primarily driven by a confluence of geopolitical tensions, supply chain disruptions, and heightened demand dynamics. The increasing prices were influenced by a combination of factors, including reduced pipeline flows due to maintenance activities, unexpected outages in major supply hubs, and a broader geopolitical landscape that saw rising tensions impacting energy trade routes. Additionally, the growing global competition for LNG cargoes, exacerbated by severe heatwaves in Asia, diverted supplies away from Europe, contributing to the bullish market sentiment. In Germany, the epicenter of natural gas price fluctuations, this quarter was marked by pronounced volatility and the highest price increases within the region. The country’s strategic shift from Russian gas to alternative suppliers, compounded by slower-than-expected inventory build-up, played a pivotal role in driving prices higher. Seasonal factors, particularly the transition from spring to summer, led to increased demand for air conditioning, further straining supply. The overall trend for Germany indicated a significant correlation between seasonality and price escalation, reflecting an environment of sustained upward pressure. The change from the previous quarter in 2024 was a substantial 15%, underscoring the recent surge in market activity. Notably, the price comparison between the first and second halves of the quarter showed a 13% increase, highlighting the escalating trend within the period. By the end of the quarter, German natural gas prices closed at Euro 34143/ 1000MWh, FD-Hamburg, cementing a quarter characterized by a predominantly positive pricing environment marked by persistent supply challenges and robust demand.
MEA
In Q2 2024, the MEA region's natural gas market exhibited a pronounced upward trend, driven largely by a mix of escalating demand and constrained supply. The region's burgeoning industrial activities, coupled with heightened electricity consumption due to soaring temperatures, were pivotal in pushing prices upward. The transition towards cleaner energy sources further amplified demand for natural gas as an alternative to more polluting fuels. Increased investments in LNG infrastructure and strategic export agreements played a crucial role in shaping the market dynamics, reflecting a positive pricing environment for natural gas. Focusing on Saudi Arabia, the country witnessed the most significant price changes in the region. The natural gas prices surged markedly, underscored by a 8% increase from the previous quarter in 2024. This rise is attributed to a combination of intensified domestic consumption and strategic advancements in natural gas infrastructure, including substantial investments in LNG export capabilities. The seasonality factor, particularly the peak summer demand for air conditioning, heavily influenced the price trends. The latest quarter-ending price stood at USD 2784/1000 MMBtu of Natural Gas , Ex-Riyadh, underscoring the consistent positive sentiment within the market. Overall, the pricing environment in Q2 2024 has been overwhelmingly positive, driven by robust demand, strategic infrastructure investments, and seasonal factors contributing to the sustained price elevation.
For the Quarter Ending March 2024
North America
The U.S. natural gas market witnessed price fluctuations in Q1 2024, driven by a mix of supply, demand, and economic factors. Initially, In January, U.S. natural gas prices surged by 7% amid speculative buying during a winter storm, only to decline in the rest of the quarter. Factors contributing to the decline included mild weather, oversupply from shale regions, and strategic production cuts by leading producers like EQT. Despite these fluctuations, economic factors like Fed rate indications and robust export demand provided some stability amidst market uncertainties.
Then later the rest of the months in Q1 lower prices prevailed due to reduced heating demand from a mild winter, despite ongoing global energy transitions. This trend contrasted with typical upward pressure caused by geopolitical tensions.
Supply factors, notably high production from shale regions and subsequent production cuts by key players, significantly impacted the market. These cuts aimed to stabilize prices in response to prolonged periods of low prices resulting from oversupply. Moreover, economic policies, such as potential rate cuts by the Federal Reserve, influenced market dynamics by weakening the U.S. dollar and supporting export demand, particularly for liquefied natural gas (LNG) to Europe.
While the quarter began with bullish sentiments and led to bearish sentiments, the market's direction remained uncertain as the quarter closed, leaving room for both ongoing challenges and potential recovery, depending on evolving market dynamics. Hence, the latest quarter ending price for Natural Gas in USA is USD 1768/1000mmBtu.
APAC
In Q1 2024, the natural gas market in China experienced notable fluctuations driven by a complex interplay of demand and supply factors, alongside geopolitical influences. Initially, the market saw an uptick in demand as China increased its spot purchases, influenced by the previous quarter's lower prices. This rise was further supported by seasonal increases in heating requirements during the colder months. However, as the quarter progressed, the demand softened due to a combination of milder weather and a slowdown in industrial activity, particularly in sectors sensitive to economic cycles.
On the supply side, China's domestic natural gas production continued to rise, thanks to enhanced output from both conventional and unconventional sources. This increase in supply was aimed at reducing reliance on imports and stabilizing domestic prices. However, the expanded supply, coupled with strategic government interventions in pricing and market regulation, occasionally led to an oversupply situation.
Geopolitical factors also played a role, with China's natural gas imports being affected by international market dynamics and relations, particularly with Russia. These factors, along with internal policy adjustments aimed at energy security and transition to cleaner energy sources, contributed to the volatile pricing and market sentiment throughout the quarter. Hence, the latest quarter ending price for Natural Gas in China is USD 1768/1000mmBtu.
Overall, the quarter was marked by these push-and-pull dynamics between rising domestic production capabilities and fluctuating demand influenced by both environmental factors and broader economic conditions, leading to a period of price adjustments and market recalibration.
Europe
In Q1 2024, Europe's natural gas market experienced a downturn in prices, primarily driven by a combination of mild winter weather and broad economic challenges. The warmer-than-expected weather across the continent significantly reduced the demand for heating, thus lowering natural gas consumption. Additionally, an economic slowdown across several European nations curtailed industrial activity, further diminishing natural gas demand. On the supply side, Europe benefited from high storage levels, which had been strategically bolstered in anticipation of potential supply disruptions, thereby easing supply concerns. The increased adoption of renewable energy sources also played a role in reducing dependency on natural gas. Furthermore, Europe continued to diversify its energy imports away from traditional pipelines from Russia to more varied sources, including increased liquefied natural gas (LNG) imports from the United States and Qatar. This diversification helped stabilize the market by reducing Europe’s vulnerability to geopolitical tensions and supply chain disruptions.
In March, Germany saw a 2.3% price hike amid reduced Russian pipeline imports and higher LNG demand. These factors, along with global LNG trends and energy policy shifts, shaped the softened prices observed during the quarter.
Market dynamics were also influenced by changes in LNG global market trends and shifts in energy policies aimed at enhancing energy security and sustainability. These factors collectively contributed to the softened natural gas prices observed during the quarter, reflecting a complex interplay between reduced demand and robust, diversified supply capabilities. Hence, the latest quarter ending price for Natural Gas in Germany is Euro 26308/1000Mwh.
MEA
In the Middle East and Africa (MEA) region, the natural gas market has been influenced by a blend of geopolitical shifts, supply variations, and evolving energy policies. Specifically, the escalation of tensions in key areas such as the Gulf has prompted concerns about supply disruptions, thereby affecting regional market stability. Countries like Saudi Arabia and Qatar have increased their focus on enhancing LNG production capacities, positioning themselves as pivotal players in the global energy market. This strategic shift is not only aimed at meeting the rising global demand but also at securing a competitive edge in the increasingly diversified international market.
Simultaneously, economic reforms and diversification efforts, particularly in Gulf Cooperation Council (GCC) countries, have led to a gradual increase in industrial activities, thereby boosting domestic gas demand. This uptick in demand is being balanced with substantial investments in renewable energy projects, which are part of broader national visions to reduce reliance on hydrocarbon revenues.
Additionally, the African natural gas sector is experiencing a transformation, driven by significant discoveries in countries like Mozambique and Tanzania. These discoveries have the potential to transform the energy landscapes of these countries and position them as major LNG exporters. However, infrastructural challenges and regulatory uncertainties pose risks to the rapid development of these resources.
The pricing dynamics in the MEA region have also been influenced by these factors, with natural gas prices showing volatility based on the interplay of regional demand-supply scenarios, global energy trends, and geopolitical stability. As countries in this region continue to navigate these complex dynamics, the natural gas market is expected to remain a critical component of their economic and energy strategies, shaping the regional energy discourse, and contributing to global energy security. Hence, latest ending prices in Saudi Arabia of Natural gas is USD 1823/1000mmBTU.
For the Quarter Ending December 2023
North America
The North American Natural Gas market has been characterized by several factors in Q4 of 2023. Firstly, the market has been bullish due to strong demand from the Mexican market, driving the growth of the market. Secondly, the moderate to high supply of Natural Gas in the market has been affected by the decline of domestic gas storage to cater to demand, leading to a gas price hike in the domestic market.
Thirdly, the colder-than-normal winter forecast has been expected to drive Natural Gas prices up. The USA, being the major player in the North American Natural Gas market, has witnessed a bullish market trend with high demand due to increased demand in the power sector and lower heating demand.
Moreover, the average gas output in the lower 48 U.S. states has reached a new record, leading to a decline in Natural Gas prices. The trend, seasonality, and correlation price percentage of Natural Gas in the USA in Q4 of 2023 have shown a bearish market trend in December with a decline of 2.3% in prices. There has been no plant shutdown reported during this quarter. The quarter-ending price of Natural Gas (USD per MMBtu) Ex-Louisiana in the USA has been USD 3.8/MT.
APAC
The APAC region's Natural Gas prices in Q4 2023 have been largely impacted by several factors. Firstly, mild weather conditions in Europe and the USA have led to decreased demand and reduced prices globally. Secondly, the escalation of the Israel-Hamas conflict and supply bottlenecks due to geopolitical conflicts have supported the rise in shipment costs. Thirdly, the increased demand in the power sector and the gradual drying up of gas inventory during winter have boosted market prices. China has seen a significant decrease in Natural Gas prices due to abundant inventory levels, diminished demand, and record production. China has been better prepared to serve its power demand compared to the previous year, and authorities have instructed utilities and producers to maximize imports and output before winter. However, colder-than-normal winter forecasts are expected to drive Natural Gas prices up, and a decline in domestic gas storage to cater to demand might lead to a hike in gas prices in the domestic market. The latest price of Natural Gas in China for Q4 2023 is USD 3490/1000 MMBtu Ex-Shanghai.
Europe
The Natural Gas market in Europe during Q4 2023 has been bearish and under pressure due to the ongoing energy crisis and weak global economy. Despite the freezing temperature in parts of Europe and supply disruptions from Australia, Natural Gas prices in Germany have continued to decline. The main factors affecting the market include the escalation of the Israel-Hamas conflict and the potential for sabotage of gas infrastructures, supply bottlenecks due to geopolitical conflicts, and the increasing demand in the power sector. However, the high domestic storage in Europe has decreased the usual Natural Gas demand from this continent, which has impacted global market dynamics. The forecasted pricing trend for Natural Gas in Germany shows a slight increase in the coming months due to the colder-than-normal winter forecast and the decline of domestic gas storage to cater to the demand. The latest price for Natural Gas FD-Hamburg in Germany for Q4 2023 is 40500 Euro/1000 MWh.
MEA
There have been no shutdowns of Natural Gas plants during the quarter. The MEA region's Natural Gas market has been impacted by the strong household demand from India during the festive season and the increased demand for gas supply from the Middle East to Europe and Asia due to the slump in Russian Gas production. The significant hike of 9.6% in the Saudi Arabian Natural Gas market in the week ending September 29 was due to global LNG prices going up amid the upcoming strong winter demand. Qatar has signed agreements with leading gas producers, including Sinopec, Total Energies, Eni, and Qatar Energy, to ease future gas supply concerns and compete with the United States to help Europe replace lost Russian supplies.
For the Quarter Ending September 2023
North America
In the third quarter, front month Natural Gas prices have been on a downtrend due to strong downstream demand for power generation and heating sectors amid hotter-than-normal temperatures. US gas consumption reported a 5.4% jump in the last week of July. However, Natural Gas prices in the US witnessed a slight drop in August compared to the previous month. An increase in production of Natural Gas in the Permian Basin, in response to rising demand from domestic as well as global consumers, has eased gas prices. Supply uncertainty has also eased since Freeport LNG’s services resumed. Australia’s gas strike at Woodside Energy’s plant has signaled a positive outcome, which has brought some calmness to the market. In the last month of the third quarter, the escalation of Australia’s gas strike, a decrease in US oil and gas count rigs, European gas supply issues, and the landfall of hurricane Idalia have contributed to the surge in Natural Gas prices. A hotter-than-normal temperature, as per the short-term prediction by Texas grid operator, ERCOT, has driven electrical demand high. Demand from Asian buyers has also been projected on the higher side due to the festive season. Thus, as of Sept. 29, Natural Gas prices closed at USD 2.7 per MMBtu, Ex-Louisiana.
APAC
In the third quarter, Natural Gas prices witnessed a bullish run in the Asian gas market. In the first half, a growing number of gas-fired power plants and increasing consumption of gas set the demand high in China. Along with the power sector, city gas has also been a primary driver for demand growth. According to official custom data, China’s Natural Gas imports were valued at 13.4 billion cubic meters (bcm) in June, 19% up when compared to the same month of the previous year. Overall global imports in terms of pipeline and liquified form were 5.84 bcm in June. The second half continued the bullish tail further with gas supply concern from Russia. Strong household demand in Asia-Pacific regions amid the upcoming festive season has driven the Natural Gas market up. A probable price hike decision of domestic gas prices by the Indian Government has excited the market. Also, Russia’s ban on gasoline and diesel has also raised concern about a probable ban on Natural Gas. Thus, September Natural Gas prices closed at USD 2.85 per MMBtu, Ex-Shanghai.
Europe
Natural Gas prices at the start of the third quarter demonstrated a declining trend due to lower demand in the power generation sector. The resumption of Norwegian gas supply post-maintenance and high European gas storage levels have also weighed down the Natural Gas prices in the domestic market. According to data from Gas Infrastructure Europe (GIE), gas inventories across the European Union and the United Kingdom amounted together to 889 terawatt-hours (TWh). However, gas prices jumped again in August, backed by supply chain trouble concerning the threat of a potential strike at the LNG export facilities in Australia over pay and work conditions. Moreover, a sharp drop in Russian gas flows to the Eurozone has kept the supply market very tight. A weaker euro than dollar has made the import prices of Natural Gas rise further in September. Limited outages of US Liquified Natural Gas (LNG) have affected the potential supply of this fuel to Europe. The Louisiana-based Cheniere Energy-owned Sabine Pass LNG terminal has been reported at a reduced rate and the Berkshire Hathaway operated Cove terminal in Maryland has halted production for four weeks for seasonal maintenance. Meanwhile, Germany has been well prepared for its winter demand as stated by Klaus Mueller, president of the German regulatory Federal Network Agency. Furthermore, an escalation of military actions in the Black Sea targeting gas supply pipelines to Europe has elevated gas supply concerns amid winter demand. Thus, as of Sept. 29, Natural Gas prices closed at 39.74 euro per MWh, FD Hamburg.
Middle East
Front month Natural Gas prices in the third quarter of 2023 demonstrated a slight increase due to strong demand from power generation amid heatwaves. Inventories continued to deplete as consumption from other downstream sectors improved, which supported the Natural Gas prices to travel upward. However, later in August, prices witnessed a drop due to an ample amount of storage to cater to the domestic demand. Increased production in major exporting countries eased the global supply chain. The export volume of Qatar, the second-largest exporter of Natural Gas, was assessed high at 10.4 Bcf/d as of August 25. September gas prices jumped again due to strong upcoming festive demand. An extended labor strike in Australia’s gas facility and a colder-than-expected winter forecast pushed the Natural Gas prices up. Meanwhile, it was also reported that Saudi Aramco marked its first investment in MidOcen Energy, which was an important move to acquire four Australian LNG projects. Natural Gas prices thus, as of Sept. 29, closed at USD 2.9 per MMBtu, Ex-Riyadh.
For the Quarter Ending June 2023
North America
Prices of Natural gas observed a floating sentiment in the second quarter of 2023. The month of April saw a moderating trend compared to the previous quarter as prices declined by 11.18 percent due to lower power demand for the energy from the industrial sector as US Fed increased interest rate at the end of March 2023 to curb inflation. Inquiries from the market participants revealed that consumer sentiments remained suppressed and the industries were operating at lower capacity. In the months of May and June, we observe a bullish trend in the pricing of Natural gas. The demand from the industrial sector increased as inflation sinks and consumer sentiments improved. The downstream demand for cooling also positively affected Natural Gas prices in the region. A price increase of 11.8 percent was observed by the end of June 2023 over April pricing. LNG exports to Europe also positively affected the pricing of natural gas in the region. Prices of Natural Gas (USD per 1000MMBtu) Ex-Louisiana were settled at USD 2433/1000MMBtu at the end of June 2023.
APAC
Prices of Natural gas observed a floating stance in the second quarter of 2023. In the month of April, a decline of 6.0 percent was observed due to global market dynamics. Natural gas inventories remained adequate to cater the domestic needs. Russian discounts also affected the price decline. Supply chains for Natural Gas remained resilient. In the months of May and June, the prices reflected a bullish trend as the heating requirements requirement in Residential and commercial demands improved but industrial demand remained weak. A price increase of 10.3 percent was observed by the end of June 2023. Chinese economic demand remained suppressed due real estate sector crisis and US China trade war. In India, the Natural Gas prices followed a similar trend. In India, natural gas prices followed the same trend. By the end of June, the price of Natural gas improved and started observing a bullish trend due OPEC+ cuts and low inventory levels. Prices of Natural Gas (USD/1000MMBtu) Ex Shanghai were settled at USD 2433/1000MMBtu in the month of June 2023.
Europe
Prices of Natural gas observed a bearish stance in the second quarter of 2023. In the month of April, a decline of 6.16 percent was observed because of decline in demand from the downstream industries and the effects of Russia Ukraine War. Natural gas strategic reserves were adequate to fulfill the demands. LNG imports from US also negatively affected the pricing of Natural gas in Europe. Imports from Norway also increased by 10 percent to ease the pricing in Germany. In the months of May and June, the Natural gas prices dropped by 27.30 percent. Supply chains for Natural Gas shifted significantly towards North Africa and remained resilient. Figures from Eurostat, the EU’s statistical agency, showed gross domestic product (GDP) fell by 0.1% in the first quarter of 2023 and the final three months of 2022 after revisions to earlier estimates pushing EU in recession. Germany’s PMI manufacturing dropped to 38.8 in the month of June indicating weak economic activities. Residential and commercial demands improved but industrial demand remained weak. Prices of Natural Gas (EUR/1000MWh) FD Hamburg were settled at EUR 30372/1000MWh in the month of June 2023.
MEA
Prices of Natural gas observed a floating sentiment in the second quarter of 2023. The month of April saw a moderating trend as seen in the previous quarter as prices declined by 10 percent due to lower power demand for the energy from the importers and polymer industries due to economic slowdown in North America, Europe and Asia Pacific. Inquiries from the market participants revealed that consumer sentiments remained suppressed and the industries were operating at lower capacity. From the supply point, increased supply due to Fadhili gas production. In the months of May and June, we observe a bullish trend in the pricing of Natural gas. The demand from the industrial sector increased as inflation sinks and consumer sentiments improved. The increased downstream demand for power also positively affected Natural Gas prices in the region. A price increase of 13.8 percent was observed by the end of June 2023 over April pricing. Saudi Arabia’s decision to continue OPEC+ cut till August also led to higher spot prices in the market as inventory by the end of June 2023 in the downstream power and chemical industries remain depleted. Prices of Natural Gas (USD per 1000MMBtu) Ex-Riyadh were settled at USD 2472/1000MMBtu at the end of June 2023.
For the Quarter Ending March 2023
North America
In Q1 2023, the price of Natural Gas in the US showcased a bearish price trend in the succeeding months. Falling Henry Hub Natural Gas cost with declining dry Natural Gas production came about in slow than-anticipated growth in US Natural Gas production. On 22nd Feb, the Freeport LNG exports terminal came into a function but unexpectedly canceled some cargoes due to a problem with one of its three liquefaction trains, raising fears that operations might take longer than expected. In March, the price of Natural Gas in the USA declined to USD 2.45 per MMBtu Ex-Louisiana. The trade volume of Natural Gas shrunk this quarter, which affected the profit margin and sales among the significant producers.
Asia Pacific
Prices continued to follow a declining trend with limited consumption and adequate product inventories. In China, the Natural Gas price slumped to its lowest during March 2023 with the price trend of 2.48/MMBtu Ex-Shanghai. China's import of Liquefied Natural Gas (LNG) drooped as the region sloped up domestic production, and pipeline imports brought about product stockpiling. Unexpectedly mild weather and adequate product in storage volumes constrained the producers to bring down their cost pattern this quarter. The decline in Natural Gas consumption from downstream power generation and heating equipment has also adversely affected the price trend. In Feb 2023, the momentum in trading of Natural Gas markets swung away from Europe and back to Asia; however, the unobtrusive increase in demand was not sufficient to elevate spot costs.
Europe
The Natural Gas prices remained on the lower end this quarter, with weak benchmark futures for February and March 2023. Towards the end of the quarter, Gas storage tanks in Europe were 56% full and were being used by downstream industries. Industries started to increase the consumption of Natural Gas, indicating which indicated a promising sign that petrochemical ventures are stepping up their demand. Nevertheless, the recovery in the industrial production units was slow. In March 2023, the price of Natural Gas in Germany slipped to Euro 44.31/ MW-hr. The demand for Natural Gas from the downstream power generation and heating equipment declined, and the European market players struggled with adequate inventories and increasing costs for storage containers.
For the Quarter Ending December 2022
North America
During the quarter ending on Dec 2022, the price of Natural Gas in the USA surged in H1 and followed a downward trajectory in the H2 2022. In Nov, the market remained tight on account of record-high export to the overseas market, making big profits on it because of continued demand from the European market. This quarter, the prices remain on the lower end compared with the previous quarter. As the weather grew warmer, concerns about tight supplies shifted to a potential decline in U.S. heating fuel demand. As a result of increasing production rates among enterprises, domestic gas supply and demand remain under control. In Dec, the price of Natural Gas in the U.S. was USD 6.0 per MMBtu Ex-Louisiana.
Asia Pacific
In Q4 2022, the Natural Gas price increased in the first half of the quarter with strong trading activities. In Oct, Beijing reportedly told state-owned natural gas importers to halt resales of cargoes to buyers in Europe and Asia to ensure China has enough supply for domestic needs this winter. During Oct, the price of Natural Gas in China surged to USD 6.31 per MMBtu Ex-Shanghai. Prices declined in Dec with an uncertain demand outlook as more countries considered restrictions on Chinese travelers with COVID infections spreading in the top NG-importing nation. The single biggest reason for falling Natural gas prices is China’s baffling COVID lockdowns.
Europe
At the end of this quarter, the Natural Gas price showcased a downtrend in the wake of rising product inventories and feeble market purchasing. With a slightly warmer forecast, fuel at storage sites delayed its use, allowing it to be stored longer for winter. German stockpiles were more than sufficient, declining the price trend. The downward movement of the costs was also driven by the rising use of wind power to produce electricity, replacing Natural gas. In Dec, the price of Natural Gas in Germany slides to Euro 117.7 MW-hr Ex-Hamburg. After a relatively mild autumn, German businesses and households saved more Natural Gas than required by the emergency plan.
For the Quarter Ending September 2022
North America
In Q3 2022, the price of Natural Gas in the USA surged in the first half of the third quarter. The benchmark futures surged on the forecast for hotter weather and higher demand. Worries about Russian gas flow to Europe, record coal prices, and the expiration of the front-month contract remain the concern. In August, the USA's natural gas price surged to USD 8.68 per MMBtu. However, towards the end of this quarter, Natural gas costs hit low market fundamentals, as the market lost energy because U.S. production beat 100 Bcf/day for the first time. Freeport LNG has postponed its resumption of the plant from mid-Oct to Nov, which further declined the prices for the domestic market.
Asia Pacific
During the third quarter of 2022, Natural gas prices in the Asia Pacific region followed the same trend as in the rest of the global market. Cost surged in the first half of this quarter, with Russia fearing slashing supply again and worsening an Asian fuel shortage. Asia and Europe were in hot competition for the dwindling pool of LNG shipments. China's battle to fulfill peak power need following hydropower disturbances in the Sichuan district expanded the production cost among major downstream derivative venture. In India, the price of Natural Gas slipped in the second half of Q3, driven by lower production and a sharp drop in imports price. Indian gas importers could not source Liquefied Natural gas (LNG) from the spot market. Most supplies are headed to Europe, where buyers are willing to offer record-high prices ahead of winter amid sharp supply curbs from Russia. In September, the cost of Natural Gas in India was USD 8.20 per MMBtu Ex-Hazira.
Europe
European Natural Gas prices show an upward trend due to the Nord Stream 2 pipeline supply cut from Gazprom, Russia, to the European region. The front gas month costs at the Dutch Title Transfer Facility (TTF), the European benchmark for Natural Gas trading, bounced. The surge in energy and utility costs drives up the downstream derivative market, pushing inflation and squeezing the edges and margins among significant ventures. With the fresh rise in gas prices, the Euro currency hit the lowest level, causing the region to recession. With the quarter end, the cost of Natural Gas in Germany is USD 222 Mw-hr.
For the Quarter Ending June 2022
North America
The prices of natural gas surged in Q2 2022 compared with the previous quarter in the US market due to market disruption caused by Russia's invasion of Ukraine, which resulted in such a price trajectory. Bullish market fundamentals and the backdrop of producers' inventories remained the key driving factors for price increases. Due to supply disruption, European unions are searching for alternatives to Russian gas imports, which drop the demand with the surge in prices. The commodity prices increase with weak purchasing power and lower investments due to squeezed profits and sales among the downstream enterprises. A fire at Freeport LNG's natural gas liquefaction plant in South Texas on June 8, 2022, has prompted the full shutdown of the office. The spot costs fell with feeble NYMEX futures for the next quarter. The prices of Natural Gas surged to their highest with the price of USD 9.3 per MMBtu on June 7.
Asia Pacific
In the Asia Pacific region, the prices of Natural Gas skyrocketed with supply constraints and strong demand from the Petrochemical market. Due to strong cost support, the Natural Gas market remained tepid this quarter compared with the previous quarter. In terms of production, particularly by private and joint venture companies, they expanded the costs because of production cuts among the endeavors. The prices rose because of tight supply and flooding interest from its downstream derivatives market. However, towards the end of the quarter, the prices slowed due to the gradual incoming of Russian Natural Gas cargoes in India and China.
Europe
In Q2 2022, the prices of Natural Gas remained on the higher end with strong market sentiments and a high purchasing appetite. After an exceptional price surge following the invasion of Ukraine in early March, prices fell back to levels but remained on the higher end. In Europe, changing temperature, the sharp fall in gas utilization, the development in LNG imports, and the high stock filling rates moderate costs. However, since mid-June, Russian gas supply slices through the Nord Stream pipeline and turnaround at Freeport LNG terminal in the US soared the spot prices again in the European market. In June 2022, Gazprom further tightened Gas supplies to European Union (EU), putting pressure on the major downstream derivative producers to meet the demand from the consumer's end
For the Quarter Ending March 2022
North America
In this quarter, the price of Natural Gas surged with rising tension between Russia and Ukraine and limited supply and bullish demand. February future contract on the New York Mercantile Exchange (NYMEX) reached nearly $4.75 per MMBtu where price rally up to be strongest since gas future debuted more than 30 years ago. Downstream Methanol fuel applications had started to grow with consumption in automobile industry is also spotted to be on the higher side. US Methanol two largest marketers Methanex and Southern Chemical sales revenue increase with increase in the demand of Methanol as a fuel industry. Against the backdrop of Russia's attack on Ukraine, the U.S. Energy Information Administration (EIA) revealed that Lower 48 petroleum gas inventories dropped 129 Bcf for the week finishing, a slightly lighter draw than anticipated. Towards the end of the quarter, the price of Natural Gas surged to 4.94 Henry Hub Natural Gas USD per million Btu. Compared with previous quarter, the price of Natural Gas in US slipped by 6%.
Asia Pacific
In Asian region, the prices of Natural gas surged as the conflict between Russia and Ukraine hampered the prices in the region. In India, the price of Natural Gas ended on high note with price of USD 5.012 per MMBtu Ex-Hazira. Spot Naphtha prices extended their gain in India. However, the downstream derivative market was observed to be weak supported by deteriorating demand from the end user consumers. Bullish sentiments of Natural Gas in global market strengthens and provided producers leverage in pricing. CNG prices in the Indian market was surged driving up the cost of cooking commuting and electricity while increasing the fertilizer subsidy bill for the government. Compared with previous quarter, the price of Natural Gas in India slipped by 12% when compared with Q4 2021.
Europe
In Q1 2022, the energy and Natural Gas prices remained on the higher end with wild price swing and fear escalate about potential disruption in Russian supplies. US LNG exports to European region increased due to low inventories and strong market sentiments. It was also heard that the spot prices of Natural Gas in Europe exceed the Asian spot prices. In Germany, the price of Natural Gas towards the end of the quarter observed to be USD 5.5 per MMBtu. On 25th March, the US and European Union (EU) joint task force to provide the 15 billion cubic centimetres of Liquefied Natural Gas (LNG) to Europe, which will slow the market tension.
For the Quarter Ending December 2021
North America
In Q4, the prices of Natural gas touched the bottom in December compared with October 2021. In October, production disruptions caused by the landfall of hurricane Ida coupled with increasing demand for energy and lack of infrastructure meant that prices of Natural gas doubled since the beginning of the year. Towards the end of Q4, Natural Gas prices in the US dropped to their lowest in the last one month amidst expectations of a warmer-than-expected winter forecast. Henry Hub Natural Gas slipped down to USD 3.7 per million MMBtu levels in December due to lower contract settlements and weak futures in the global markets.
Asia Pacific
The prices of Natural Gas kept on decreasing month on month from October to December. In Q4, several buyers' year-end lull and wait-and-see stance have surrounded the region’s energy markets, causing the prices to remain within a range in the country. The downstream LNG market regained weakness on December 20th despite European supplies turning firmer due to continued tightness. Natural Gas prices were observed to be USD 3.97 per MMBtu for a larger part of December. As per market players, the domestic industry had high inventory levels. Natural Gas prices have largely stood rangebound during the weak on growing demand-related concerns across the as the Omicron scare pushed down global energy markets. Ex-Hazira price for Natural Gas has been assessed around INR 289100 per 1000 MMBtu as last week of Dec.
Europe
Gas prices in Europe reached unprecedented levels in Q4 2021. Fear that Europe might run out of gas in February or March drove the prices. Gazprom’s failure to fill its storage facilities in Europe was a significant driver of the perceived inadequacy of European reserves for the winter. Several factors have pushed the prices of Natural Gas amid strong demand as the effect of the pandemic lockdown eases. At the same time, import volume from Russia remains low due to disruption in gas flow and political tensions. Elevated gas prices pushed the electricity bills higher in the countries like Britain and Italy, which use a large amount of gas to generate power.
