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.
