"Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?

[Tom Nolan + 2,443]

I contend that NatGas Futures are way overpriced for this time of year.  Something is wacky and weird.  Are "official" figures being padded? -Tom Nolan

QUOTE:  US natural gas futures rose to almost $6.5 per million British thermal units on Friday, closing on the highest level since 2008, as worries about global energy supplies exuberated by the war in Ukraine boosted the demand. On Thursday night, European Union countries agreed to ban coal imports from Russia and pledged to start working on an embargo on Russian oil, gas and nuclear fuel, putting additional pressure on energy markets. Shipments of LNG to Europe are already at record levels and the US is facing greater pressure to help Europe secure more supplies. Meanwhile, US natural gas inventory data showed a more-than-anticipated draw of 33 bcf last week to a nearly 3-year low and at around 17% below their five-year average, due to chilly temperatures in late March. Weather forecasts also pointed to wintry weather in parts of the US until mid-April, which could boost heating demand. For the week, the contract is set to surge more than 12% bringing the year-to-date gain to 70%.   https://tradingeconomics.com/commodity/natural-gas

Natural Gas Trading Picks Up Considerably Amid High Volatility

By Charles Kennedy - Apr 08, 2022, 10:00 AM CDT

• Strong demand and heightened volatility have boosted natural gas trading.
• Banks and oil companies are beefing up their trading desks.
• Natural gas has come to the focus of attention once again amid Europe's energy crunch.

Join Our Community

Natural gas trading activity in the United States has picked up considerably amid heightened price volatility and indications of strong demand thanks to the European energy crunch.

This is according to trading industry insiders quoted by Reuters in a report that also notes the recent sharp swings in natural gas prices and the EU's scramble to find replacements for Russian gas.

As a result of these developments, according to unnamed Reuters sources, TD Bank is ramping up its natural gas trading desk, as is at least one investment fund, while others are opening up gas trading desks, including refiner Philips 66.

"A significant driver to this growth is the outsized returns a lot of these trading shops saw in 2021," the managing director of recruiter Aurex Group, David Byrne, told Reuters.

"We are investing in our energy sales and trading capabilities while equally committed to a comprehensive offering to help our clients transition to a low carbon economy," the global head of commodities at TD Bank told Reuters.

Natural gas has come to the focus of attention once again amid Europe's energy crunch that began last year amid tight supplies of the fuel and became a lot more severe this year after Russia's invasion of Ukraine. The EU has declared that it plans to completely stop buying Russian gas within a year and is currently in a frantic search for alternatives.

U.S. LNG is one of the most obvious ones, and this week, industry executives hosted several EU member-state delegations in Texas, following President Biden's pledge of at least 15 billion cu m in additional U.S. LNG volumes for Europe this year.

"The situation in Europe is so precarious. All these countries that are dependent on Russian gas are committed to giving it up, in some cases completely," said Fred Hutchinson, the chief executive of trade body LNG Allies.

However, the executive admitted that building new LNG capacity will take years, and there won't be much new export capacity until about 2025. "The capacity challenges in 2022 are great but the opportunities in a few years are really terrific," he said.

By Charles Kennedy for Oilprice.com

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https://oilprice.com/Energy/Natural-Gas/Natural-Gas-Trading-Picks-Up-Considerably-Amid-High-Volatility.html

Edited April 8, 2022 by Tom Nolan

[Tom Nolan + 2,443]

On 4/8/2022 at 12:01 PM, Tom Nolan said:

I contend that NatGas Futures are way overpriced for this time of year.  Something is wacky and weird.  Are "official" figures being padded? -Tom Nolan

Here is Christopher Lewis, a professional trader who has been in the business for decades:

QUOTE

Nonetheless, the market is very small, and I have had recent conversations with very large gas traders out of Europe that had no idea this contract was about US gas. (Some of these people have been trading energy for 30 years.)

I am a bit skeptical of a continuation of the uptrend for a longer-term, but as the natural gas market is very small, it can overshoot quite a bit. Because of this, I am going to be waiting for a higher timeframe type of signal to start shorting, because quite frankly we are about to enter a season of low demand.

Having said that, the war in Ukraine has had a major outsized effect on the contract, especially as there is a limited amount of LNG leaving the United States to reach European shores. That is the idea of course, that Russian gas being cut off from the EU, in a self-imposed type of sanction, should drive up demand for US gas. However, there is a major problem with the temperatures rising soon, and of course, the fact that the Europeans do not have the capacity to “re-gasify” LNG.

https://www.fxempire.com/forecasts/article/natural-gas-markets-continue-to-extend-higher-965482

 

David Becker 

David Becker gives an interesting stat:

According to the EIA, U.S. LNG exports decreased by two vessels weekly. Twenty-three LNG vessels with a combined LNG-carrying capacity of 86 Bcf departed the United States between March 31 and April 6.

https://www.fxempire.com/forecasts/article/natural-gas-prices-break-out-to-fresh-highs-on-strong-lng-demand-965750

 

[Tom Nolan + 2,443]

3 minutes ago, Tom Nolan said:

Nonetheless, the market is very small, and I have had recent conversations with very large gas traders out of Europe that had no idea this contract was about US gas. (Some of these people have been trading energy for 30 years.)

Here is a chart of the U.S. contract which is NatGas produced in the U.S.   https://tradingeconomics.com/commodity/natural-gas

EU contract for Natural Gas - https://tradingeconomics.com/commodity/eu-natural-gas

UK contract for Natural Gas - https://tradingeconomics.com/commodity/uk-natural-gas

[Tom Nolan + 2,443]

Natural Gas Prices Rise 15.6% for the Week

https://www.fxempire.com/forecasts/article/natural-gas-prices-rise-15-6-for-the-week-969336

David Becker

Thursday prior to Good Friday April 14th

Key Insights

• Natural gas prices hit a fresh 13-year high.
• The natural gas rig count grew by two, according to Baker Hughes.
• Reports surfaced that Europe was drafting a sanction to halt Russian imports.

This message sounds like a recording. Natural gas prices hit a 13-year and closed near the day’s highs. Rig count grew by two, which is light related to the rise in prices. LNG demand remains strong, and natural gas arrivals at LNG terminals rebounded to 12.7 Bcf per day.

According to the National Oceanic Atmospheric Administration, the weather is expected to be colder than normal throughout the East Coast. However, warm weather will soon moderate temperatures which is reflected in the 8-14 days.

Technical Analysis

Natural gas prices hit a fresh 13-year and closed at the highs foreshadowing higher prices. Prices rose nearly 16% for the week.  Target resistance is seen near the July 2008 highs at 13.68. Support is seen near the 10-day moving average at 6.37.

Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought. The fast stochastic is printing a reading of 97, above the overbought trigger level of 80. Additionally, the RSI is printing a reading of 83, above the overbought trigger level of 70.

Medium-term momentum has turned positive. The MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to an acceleration in the underlying price of natural gas.

 

[Tom Nolan + 2,443]

https://community.oilprice.com/topic/27790-global-lng-body-urges-governments-to-support-fuel-buyers-amid-ukraine-crisis-reuters-fxempirecom/

 

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/US-Natural-Gas-Prices-To-Spike-As-Exports-Boom.html

U.S. Natural Gas Prices To Spike As Exports Boom

By Irina Slav - Apr 14, 2022, 7:00 PM CDT

• Europe is determined to wean itself off Russian natural gas following Putin’s decision to invade Ukraine, and U.S. LNG is one of the major alternatives.
• Biden has already committed to sending an additional 15 billion cubic meters of natural gas exports to the EU this year, a move that sent prices higher.
• Natural gas prices hit the highest level in thirteen years last week and, while the coal price rally was partly to blame, rising LNG exports played a part.

Join Our Community

Meet Europe, the newest and unlikeliest star on the LNG stage. Europe recently had to reconsider its emissions-cutting ambitions in light of the danger of an unprecedented energy crunch. U.S. natural gas producers are only too happy to help. Cue worries about a domestic shortage.

European Union governments have been discussing for weeks ways to cut their reliance on Russian oil and gas.

There have been claims that the EU can make it through the summer even if gas imports from Russia are cut because there is enough gas in storage. Still, Brussels has stopped short of imposing an embargo on Russian gas, with Germany admitting it cannot afford one.

There have been plans to reduce the overwhelming dependence on Russian gas by urgently finding alternative suppliers, including pipeline gas from North Africa and Central Asia, and liquefied natural gas from Qatar and the United States. And the United States has been eager to help.

President Biden pledged an additional 15 billion cubic meters of natural gas exports to the European Union this year in the form of LNG, while the EU pledged to create the demand for 50 billion cubic meters annually of U.S. LNG "until at least 2030".

Before the mutual pledges, Europe had already become the largest buyer of U.S. LNG at the start of this year, taking in a record 12.5 billion cubic meters in the form of the super-chilled fuel. But there is a problem. Demand, especially from Europe, is set to rise sharply this year: Wood Mac expects European LNG to add 25 metric tons by the end of 2022. Global supply, on the other hand, is seen adding 17 million tons.

The signs of this imbalance are already visible in the United States. Last week, natural gas prices hit the highest level in 13 years, and while some analysts blamed it on the coal price rally, record LNG exports certainly contributed to the trend.

Natural gas prices are "sensitive to any near-term supply concerns created by events like a ban on Russia coal exports, abnormally cold weather," Tortoise portfolio manager Rob Thummel told MarketWatch last week. But perhaps more importantly, U.S. natural gas stocks have fallen.

For the week ending April 1, the Energy Information Administration reported that national natural gas stocks were 17 percent below the five-year seasonal average. The agency noted that stocks of working gas were within the five-year average, and yet prices continued to rise.

Related: Chinese Refiners Cut Output At An Alarming Rate

Reuters' John Kemp noted in a recent column that U.S. natural gas stocks ended the winter of 2021-2022 at a three-year low of 1.382 trillion cubic feet. Working stocks, he also reported, were 19 percent below the pre-pandemic five-year average for the start of April. And all that was because of higher exports.

Summer is normally a lower-demand season, so prices may stabilize at more palpable levels while U.S. exports to Europe remain high, provided Europe has freed up space for the incoming gas. But then exports are likely to remain strong as the northern hemisphere heads into the winter of 2022-2023.

Sanctions against Russia will still be in place; the EU and the U.S. have made this clear, regardless of how the war in Ukraine develops over the next six or so months. If anything, by then, there will be more sanctions, possibly ones that directly target the country's hydrocarbons industry besides coal. And this suggests that the supply-and-demand situation with natural gas in the U.S. may become tighter.

Earlier this month, U.S. shale gas and LNG producers met with delegations from several EU member states eager to boost their purchases of U.S. liquefied gas. This eagerness could be crucial for final investment decisions on new LNG export capacity. But besides the eagerness, gas producers would need substantial long-term commitments in order for these projects to make economic sense.

Most of the eager LNG importers are quite small gas consumers, such as Latvia and Bulgaria. Others that took part in the meetings, such as Germany and France, on the other hand, are worthy future clients, despite renewable energy plans that may compromise their worth over the longer term.

Indeed, the industry itself said as much: "The capacity challenges in 2022 are great, but the opportunities in a few years are really terrific," said Fred Hutchinson, the chief executive of trade body LNG Allies, on the sidelines of the meetings.

These opportunities are not in Europe only, either. Asia is eager to reduce its pollution levels, and it is investing billions in gas import infrastructure, Tortoise senior portfolio manager Matt Sallee said this week during a regular podcast.

"The projects target using primarily US gas to reduce Asia's dependence on coal which cuts CO2 over 50%, a critical tool to achieving global emissions goals," Sallee said, noting, "As you can imagine the majority of investment is in China where over 30 LNG import terminals are under construction. The bottom line is between reducing Russian dependence for Europe and coal dependence for Asia an absolutely massive call on US gas exists over the next several years."

In all likelihood, therefore, we will be seeing more LNG export capacity coming on stream in the United States over the next few years. The problem is that during these years, prices for the commodity may remain higher than comfortable at home as demand from abroad runs high production tries to catch up with it. In other words, we may well see a repeat of the higher-for-longer scenario we are already seeing in crude oil.

By Irina Slav for Oilprice.com

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[Tom Nolan + 2,443]

From Irina Slav's article above: "provided Europe has freed up space for the incoming gas"

https://oilprice.com/Energy/Energy-General/Europe-Is-Running-Out-Of-Space-For-LNG.html

Europe Is Running Out Of Space For LNG

By Irina Slav - Feb 18, 2022, 10:00 AM CST

• Due to high demand and fears that Russia might turn off its gas supply to Europe, the continent has been importing huge amounts of LNG.
• Now, Europe is fast running out of processing capacity for the gas and the added cost of squeezing more cargoes through other countries wouldn’t be viable.
• Currently, an estimated two-thirds of U.S. LNG cargoes are set to be delivered to European destinations, but those shipments may soon decline.

Join Our Community

After the massive influx of U.S. liquefied natural gas to make up for lower pipeline supplies from Russia amid high demand, Europe is running out of processing capacity for the gas, Reuters has reported.

Europe turned into the biggest market for U.S. liquefied natural gas over the past three months as concern about the geopolitical tensions around Ukraine prompted the EU to seek alternatives for Russian gas in case Moscow turned the taps off, even though Moscow has repeatedly said that it has no such plans.

Because of the increase in LNG shipments to Europe, the United States also overtook Qatar to become the world's largest exporter of the commodity earlier this year. In January, Europe took in over 16 billion cubic meters of American liquefied natural gas, and this month's shipments are also expected to remain elevated, with more than 6 billion cubic meters shipped since the start of February.

Right now, an estimated two-thirds of U.S. LNG cargoes are slated to be delivered to European destinations. Storage, however, is filling up, which means that soon, LNG shipments from the United States might start to decline.

"A few cargoes could be squeezed into some other countries, but not significant supply," Rystad Energy senior analyst Kaushal Ramesh told Reuters. This would require additional logistics, which, Ramesh said, would "burn a hole through buyers' pockets, again."

The European Union has a limited capacity of LNG import terminals where the superchilled gas is regasified before it is sent along pipelines to its final destinations. Spain and France have the biggest import capacity in the EU, with the UK coming in second in Europe as a whole with 50 billion cubic meters in annual nameplate LNG import capacity. Germany, on the other hand, the biggest gas market in Europe, has zero LNG import terminals.

By Irina Slav for Oilprice.com

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[Tom Nolan + 2,443]

https://www.marketwatch.com/story/why-natural-gas-prices-just-notched-a-5th-straight-weekly-gain-11649962925?siteid=yhoof2

https://archive.ph/7Zpqx

U.S. natural gas is trading at an ‘insane’ price — Here’s why it just hit a nearly 14-year high

Last Updated: April 15, 2022 at 11:34 a.m. ET

Natural gas posts five straight weekly gains

Natural-gas futures on Thursday posted a gain for the holiday-shortened week, their fifth weekly climb in a row, with prices for the fuel settling at their highest in close to 14 years.

The front-month May contract for natural gas NGK22, +4.63% settled at $7.30 per million British thermal units on Thursday, up 30 cents, or 4.3% for the session. Prices for the week posted a gain of more than 16%, according to Dow Jones Market Data.

“$7 natural gas price is insane, and well beyond all pricing models we had run until now,” said Manish Raj, chief financial officer at Velandera Energy Partners.

Most financial markets were closed on Good Friday, including energy trading on the New York Mercantile Exchange.

Thursday’s settlement was the highest for a front-month contract since October 2008, and the five-week climb was the longest such stretch of gains since October 2021.

The catalyst behind this week’s rally in natural gas has been a “late season blast of cold weather making its way across the country,” boosting demand for heating in many parts of the nation, said Tyler Richey, co-editor at Sevens Report Research. He also said a pipeline outage in Alabama took some natural-gas supply offline for an “indefinite amount of time,” contributing to the price climb.

Even so, the reason behind the rise in natural-gas prices to the highest levels since 2008 goes beyond current weather conditions and forecasts, Richey told MarketWatch. “This has been the result of an “increasingly bullish fundamental backdrop as inventories are now sitting 23.9% lower than the same period last year, and 17.8% lower than the five-year average.”

The Energy Information Administration on Thursday reported that working natural gas in U.S. storage rose 15 billion cubic feet for the week ended April 8. That increase was bigger than the average rise of 10 billion cubic feet expected by analysts polled by S&P Global Commodity Insights, but less than the five-year average supply climb of 33 billion.

At 1.397 trillion cubic feet, supplies are 439 billion less than a year ago and 303 billion below the five-year average, according to the EIA. The EIA on Friday noted that the U.S. ended the winter with the least natural gas in storage in three years.

Tight storage “paired with strong demand so far in the spring ‘shoulder season’, when supply is supposed to build substantially before summer demand picks up, has bolstered prices as supply is expected to remain well below average for the foreseeable future,” Richey said.

Geopolitical unrest in eastern Europe is also keeping a bid under the market as Russian energy exports could come to a halt at any time, he said.

The New York Times reported Thursday that European Union officials were drafting a ban on oil imports from Russia. The EU has issued various sanctions on Russia, but has been reluctant to ban Russian oil given that some of its members are highly dependent on those imports.

“Due to tragically high electricity prices in Europe, all interchangeable energy sources — coal, natural gas and oil CL.1, +2.20% BRN00, -0.04% — have become intertwined such that [the] price of one influences the price of the others,” said Velandera’s Raj. Coal prices have rallied in recent weeks, and coal competes with natural gas as an energy source.

Even so, Richey said natural-gas prices may have become overbought in the near term.

“A pullback on any bearish news should not come as a surprise,” he said. “In such an event, we should look for initial support near $6.33 and more formidable support down near $5.50.”

A drop to either of those targets would likely present a “buying opportunity based on both the bullish fundamental backdrop and increasingly positive technical trends of late” in natural gas, said Richey.

Natgas trading at 14-year high Natural Gas Continuous Contract [GRAPH]

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/US-Natural-Gas-Inventories-Fall-To-Three-Year-Low.html

U.S. Natural Gas Inventories Fall To Three Year Low

By Tsvetana Paraskova - Apr 15, 2022, 10:00 AM CDT

• Higher exports and elevated demand have pushed U.S. natural gas in storage to its lowest level in three years.
• Gas in underground storage in the Lower 48 states totaled 1,387 billion cubic feet (Bcf) as of the last day of March.
• The U.S. is exporting record volumes of LNG as the United States looks to help European allies with non-Russian gas supply.

Join Our Community

Higher demand for heating and record LNG exports left U.S. natural gas in storage at the end of the winter at its lowest level in three years, after larger-than-normal storage withdrawals this past winter, the Energy Information Administration (EIA) said on Friday.

Because of the higher withdrawals, by the end of March, the U.S. had the least amount of natural gas in underground storage in the Lower 48 states since 2019.

Working natural gas in underground storage facilities in the Lower 48 states totaled 1,387 billion cubic feet (Bcf) as of the last day of March this year. Inventories were 17 percent lower than the previous five-year average (2017–21) for that time of year, EIA’s Weekly Natural Gas Storage Report showed on Thursday. 

A colder January 2022 and record-high U.S. liquefied natural gas (LNG) exports led to more withdrawals despite the fact that domestic production of natural gas increased, the EIA says.

The U.S. is exporting record volumes of LNG as the United States looks to help European allies with non-Russian gas supply.

Following the Russian invasion of Ukraine, the European Union and the United States announced at the end of March a deal for more U.S. LNG exports to the EU as the latter seeks to replace Russian supplies, on which it is dependent. According to the terms of the deal, the United States will deliver at least 15 billion cubic meters of liquefied natural gas to the EU this year more than previously planned, the White House said in a fact sheet.

Earlier this month, U.S. shale gas and LNG producers met with delegations from several EU member states eager to boost their purchases of U.S. LNG. This eagerness could be crucial for final investment decisions on new LNG export capacity.

Record LNG exports out of the U.S. have sent the benchmark Henry Hub front-month futures to above $7 per per million British thermal units (MMBtu) this week, after the price hit $6/MMBtu just last week.

By Tsvetana Paraskova for Oilprice.com

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https://oilprice.com/Latest-Energy-News/World-News/National-Grid-Excess-UK-Gas-Supply-Could-Help-Europe-Boost-Storage-Levels.html

National Grid: Excess UK Gas Supply Could Help Europe Boost Storage Levels

By City A.M - Apr 15, 2022, 2:30 PM CDT

The UK will have enough gas to meet demand this summer and could sell more supplies to Europe due to low storage levels on the continent, revealed National Grid in its annual summer outlook.

It expects higher UK gas demand in the six months between April and September 2022 compared to last year – forecasting demand at 34bn cubic meters (bcm) compared to 31.9bcm in the same period last year.

Demand is very much in line with supply, chiefly from the North Sea and Norway, which is forecast at 34 bcm compared to 31.5 bcm last year.

The UK has pledged to phase out Russian oil and coal imports, and Business Secretary Kwasi Kwarteng is considering a similar ban on Kremlin-backed gas supplies.

Currently, the UK gets around three percent of its gas from Russia, while the European Union (EU) relies on Russia for 40 percent of its needs.

National Grid suggested the UK would be in a position to provide supplies to the trading bloc, which is vulnerable to escalating geopolitical tensions.

The UK can export gas to Europe via interconnectors, and National Grid expects UK average exports to Europe at 5.4 bcm, up from 0.7 bcm last summer period.

Last month, Russian President Vladimir Putin signed a decree ordering foreign buyers to pay for gas shipments in roubles instead of euros or face going without Russian supplies.

Buyers would have to open up a Gazprombank account which would convert the currency prior to the transaction into roubles.

Most European buyers have refused to do this, prompting concerns about supply.

National Grid explained: “This uncertainty, coupled with high gas prices and low EU storage, means that higher volumes of gas from alternative sources may be required to refill EU storage to minimum levels in preparation for winter 2022/23.”

European storage levels ended the winter season at the end of March at 26.5 bcm, below the five-year average.

The EU has since committed to maintaining storage levels at 90 percent across the continent heading into this winter.

By CityAM 

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[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/EU-Warns-Members-That-Paying-Rubles-For-Gas-Would-Violate-Sanctions.html

EU Warns Members That Paying Rubles For Gas Would Violate Sanctions

By ZeroHedge - Apr 15, 2022, 1:30 PM CDT

An internal European Commission note, the contents of which has come to light and is being reported for the first time on Thursday, has spelled out that European buyers agreeing to pay for Russian gas in roubles would be violating EU sanctions against Moscow. 

"This mechanism would lead to a breach of the existing EU restrictive measures adopted in respect of Russia, its government, the Central Bank of Russia, and their proxies," Reuters reports of decrees in the internal note after reviewing its contents.

It threatens to further escalate the energy standoff which has ensued after Vladimir Putin demanded payment for Russian gas in roubles by "unfriendly countries" which have leveled sanctions on Russia in the wake of the Feb.24 Ukraine invasion - the exemptions given to Austria and Hungary of late notwithstanding. 

 

According to more from the internal memo: 

The EU buyer would still pay Gazprombank in the contract currency - euros or dollars - but the purchase would only be complete once Gazprombank exchanges the currency into roubles in a deal with the Russian central bank, and deposits the roubles in the second account, the note said.

The memo underscores, "The effect ... is that a payment is completed not in the currency established under the contract at the moment it is deposited in the accounts ... but rather only at an unknown and undefined moment once the foreign currency ... is converted into roubles and credited to the second special account."

The European Commission wrote further, "The Russian State, through its central bank, has total control over the foreign currency... which it can manipulate entirely to its own benefit."

Essentially the commission ruling on the matter would make Putin's rouble stipulation completely off limits for individual European countries and entities, especially as the process would involve Russia overseeing the whole payment process. 

Meanwhile, on Thursday Putin addressed the crisis in fresh statements. "Attempts by Western countries to squeeze out Russian suppliers and replace our energy resources with alternative supplies will inevitably affect the entire world economy. The consequences of such a step can become very painful, and first of all, for the initiators of such a policy themselves. What is surprising here is that our so-called partners from unfriendly countries admit that they cannot do without Russian energy resources, including natural gas, for example."

He talked about reorienting "our exports to the fast-growing markets of the south and east..." and warned Europe at the same time:

"A reasonable alternative for Europe simply doesn’t exist. Yes, it's possible, but right now, it doesn’t exist. Everyone understands this; there are simply no free volumes on the global market right now, and supplies from other countries — primarily from the United States, which can be sent to Europe — will cost consumers many times more and will affect the standard of living of people and the competitiveness of the European economy,” Putin said.

He also addressed instances of payment failures and delays...

"Banks from unfriendly countries delay the transfer of payments. I will remind you, the task has already been set to transfer payments for energy resources in national currency, to gradually move away from the dollar and the euro. In general, we intend to radically increase the share of settlements in national currencies in the foreign trade system," Putin said.

Thus, given the contents in this latest European Commission note, it looks as if there's no off-ramp and the energy standoff will continue. At the same time Putin is touting that Russia still has 'friends' and thus greater options in the east and south, without doubt including India and China.

By Zerohedge.com

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[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Russia-Says-Some-Buyers-Agreed-To-Rubles-For-Gas-Payments.html

Russia Says Some Buyers Agreed To Rubles-For-Gas Payments

By Tsvetana Paraskova - Apr 15, 2022, 3:30 PM CDT

Some of Russia’s natural gas customers have agreed to pay in rubles for Russian gas, Deputy Prime Minister Alexander Novak said on Friday.

Last month, Vladimir Putin said that “unfriendly” nations should pay in rubles for natural gas.

Russia had set a March 31 deadline for the countries it considers “hostile”—including the United States, all EU member states, Switzerland, Canada, Norway, South Korea, Japan, and many others—to start paying in rubles for natural gas.

The EU has rejected Putin’s demands for payments in rubles, while Russia did not immediately cut off the gas supply to Europe after April 1, partly because it is dependent on revenues from gas and partly because payments for gas delivered after April 1 are not due until later this month or early May.  

The Kremlin has signaled the gas-for-rubles demand is just the beginning of a switch to the Russian currency for Russian exports.

“We expect the decision [to switch to rubles] from other importers,” Novak was quoted by Reuters as saying at an energy ministry in-house magazine.

The Russian official, however, did not disclose which buyers had agreed to pay in rubles for gas.

Armenia, for example, has already started paying in rubles for Russian gas, Armenian Economy Minister Vahan Kerobyan told Russian outlet RBC in an interview published on Friday. According to the Armenian minister, the pricing of the gas is being made in U.S. dollars, but the actual payment is now being made in Russian rubles.

In the EU, Hungary—whose Prime Minister Viktor Orban has been in close ties with Putin for a decade—said last week that it was ready to pay in rubles for Russian natural gas. With comments from officials over the past week, Hungary has broken ranks with the EU, which has been seeking to present a unified front in the face of Putin’s demands for rubles for Russian gas.

By Tsvetana Paraskova for Oilprice.com

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[Tom Nolan + 2,443]

https://community.oilprice.com/topic/26702-profound-russian-ruble-relaunched-linked-to-gold-and-commodities-by-the-famous-ronan-manly-note-the-censorship-by-the-multipolar-new-world-order-of-the-great-reset/?page=2#comment-184917

 

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/US-Natural-Gas-Prices-Hit-Highest-Level-In-14-Years.html

U.S. Natural Gas Prices Hit Highest Level In 14 Years

By Tsvetana Paraskova - Apr 18, 2022, 11:00 AM CDT

• The benchmark U.S. natural gas price soared by more than 7% early on Monday.
• Gas prices hit their highest level since the second half of 2008.
• Below normal temperatures and strong exports are driving the rally in natural gas.

Join Our Community

The benchmark U.S. natural gas price soared by more than 7% early on Monday to hit the highest level since the second half of 2008, as Europe races to buy non-Russian gas after Putin’s invasion of Ukraine.

At 10:18 a.m. ET, the front-month futures price at the Henry Hub had jumped by 6.37% at $7.755 per million British thermal units (MMBtu). That’s more than double the price of the U.S. benchmark compared to the start of this year.  

In the week to April 12, speculators increased their bullish bets for a second week, with buying concentrated in gold, grains, and natural gas, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said on Sunday.

Last week, U.S. natural gas prices reached the highest close at $7.3 since 2008.

“Below normal temperatures and strong exports driving the current tightness with stockpiles now almost 18% below the usual level,” Hansen noted.

Higher demand for heating and record LNG exports left U.S. natural gas in storage at the end of the winter at its lowest level in three years, the Energy Information Administration (EIA) said on Friday.

Because of the higher withdrawals, by the end of March, the U.S. had the least amount of natural gas in underground storage in the Lower 48 states since 2019.

A colder January 2022 and record-high U.S. LNG exports led to more withdrawals even though domestic production of natural gas increased, the EIA said.

The U.S. is exporting record volumes of LNG as the United States looks to help European allies with non-Russian gas supply.

In another bullish factor for natural gas prices, immediate demand in the United States is expected to be strong Monday through Wednesday, as chilly late-season weather systems track across the Midwest and Northeast with rain and snow showers, as well as cooler than normal lows of 20s and 30s, NatGasWeather.com noted on Monday.  

By Tsvetana Paraskova for Oilprice.com

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US natural gas futures broke above the $8/MMBtu level for the first time since September 2008 as soaring global demand for gas to replace Russian fuel keeps LNG exports at record highs while higher demand for heating supercharged existing upward momentum in the market. Weather forecasts point to another round of winter weather in the middle of spring, with much of the eastern and northern states expecting more snowfall this week. Robust domestic and overseas demand delayed the start of the storage injection season, with natural gas in storage now at its lowest level in three years. US natural gas prices are now more than doubled since the beginning of 2022, adding to inflationary concerns across the economy.

https://tradingeconomics.com/commodity/natural-gas

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/Canadian-Gas-Stocks-Are-Booming-As-Henry-Hub-Prices-Soar.html

Canadian Gas Stocks Are Booming As Henry Hub Prices Soar

By Alex Kimani - Apr 18, 2022, 12:00 PM CDT

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Last week, U.S. natural gas futures notched their fifth weekly gain in a row, up 96% YTD and hit their highest settlement since October 2008. The front-month May contract (NG1:COM) jumped 16% for the week to settle at $7.30/MMBtu.

The interesting part: investors are betting the surge will last for months, if not years.

You can tell this by looking at trends in the nat. gas futures markets: futures due for settlement 10 months out are also trading above $7 on while the January 2024 contract is above $5, a clear indication of strong bullish sentiment running through the gas markets.

A late-season blast of cold weather across the U.S. was a major reason for last week's surge. However, another major reason for the sustained increases that could continue is an "increasingly bullish fundamental backdrop as inventories are now sitting 23.9% lower than the same period last year, and 17.8% lower than the five-year average," as Tyler Richey, co-editor at Sevens Report Research, has told MarketWatch.

Last week, the U.S. government reported that gas in storage rose by 15B cf, less than half the normal rise of 33B cf, bringing total storage to 1.397T cf. This means that supplies are 439Bcf less than a year ago and 303Bcf below the five-year average.

Combined with "strong demand so far in the spring 'shoulder season,' when supply is supposed to build substantially before summer demand picks up, has bolstered prices as supply is expected to remain well below average for the foreseeable future," Richey has said.

The biggest reason, however, for the natural gas surge is that foreign countries are signing large deals to import U.S.-produced gas in the form of liquefied natural gas, or LNG. Europe wants American gas so that countries there can pivot away from Russian gas. With U.S. exporters set to meet with customers in Berlin this week, additional demand-related news could be coming from the likes of Cheniere Energy (NYSE:LNG) and Tellurian Inc. (NYSE:TELL).  Related: U.S. Natural Gas Prices Hit Highest Level In 14 Years

As you might expect, natural gas equities have been flying: last quarter, the United States Natural Gas ETF (NYSEARCA:UNG) and the United States 12 Month Natural Gas ETF (NYSEARCA:UNL) emerged as the best-performing ETFs across the entire U.S. market, notching returns of 57.9% and 53.3%, respectively.

However, the American energy market has nothing on its neighbor to the north: Canada's famous Oil Patch.

The Canadian energy market has been playing chess while everyone else is playing checkers: the country's energy benchmark, Horizons S&P/TSX Capped Energy ETF (HXE.TO), is up a roaring 101% over the past year, nearly 40 percentage points better than its American brethren and more than 4x higher the S&P/TSX Composite Index return. Horizons HXE seeks to replicate the performance of the S&P/TSX Capped Energy Index, net of expenses. The S&P/TSX Capped Energy Index is designed to measure the performance of Canadian energy sector equity securities included in the S&P/TSX Composite Index.

Over the past few years, a  vicious one-two-three punch started with a gloomy long-term future outlook due to rampant fossil fuel divestments, climate change policies, and decarbonization, as well as shorter-term, but severe shocks from the COVID-19 crisis threw Canada's most important exports industry into an existential crisis. Meanwhile, the drumbeat of exits by foreign oil firms bailing on the unprofitable tar sands added an extra layer of gloom for an industry that's responsible for a fifth of Canada's exports.

But with the oil and gas comeback, long-suffering Canadian energy stocks are looking like real bargains.

Source: Y-Charts

Here are some top Canadian gas stocks trading on the TSX and American exchanges. Many are mid-and small-cap companies, underscoring the strength of the bull market.

1. NuVista Energy Ltd

Market Cap: $2.0B

12-Month Returns: 408.6%

NuVista Energy Ltd .(OTCPK:NUVSF)(TSX:NVA) is a  Calgary, Canada-based oil and natural gas company that engages in the exploration, development, and production of oil and natural gas reserves in the Western Canadian Sedimentary Basin. The company primarily focuses on the condensate-rich Montney formation in the Wapiti area of the Alberta Deep Basin. 

NuVista is reaping huge dividends for its massive investments in the natural gas business.

Last year, the company's adjusted cash flows more than doubled and allowed the company to pay down a significant amount of its long-term debt. The company is targeting a long-term sustainable net debt target of less than 1.0 times adjusted funds flow in the stress test price environment of US$ 45/Bbl WTI and US$ 2.00/MMBtu NYMEX natural gas, representing a target net debt level of $200 - $250 million. Related: Oil Prices Rally Back To Pre-Strategic Petroleum Release Levels

2. Birchcliff Energy Ltd

Market Cap: $2.1B

12-Month Returns:239.9%

Another Calgary-based energy company, Birchcliff Energy Ltd.(OTCPK:BIREF) (TSX:BIR) is an intermediate oil and natural gas company that acquires, explores for, develops, and produces natural gas, light oil, condensate, and natural gas liquids in Western Canada.

The company holds interests in the Montney/Doig resource play located approximately 95 km northwest of Grande Prairie, Alberta. Its asset portfolio also includes various other properties, including the Elmworth and Progress areas of Alberta. As of December 31, 2021, the company had interests in 200,712 net acres of undeveloped land, as well as proved plus probable reserves of 1,022 million barrels of oil equivalent. 

A couple of years ago, Birchcliff was struggling thanks to low natural gas prices and a high net debt position. But the situation has improved dramatically, and Birchcliff is taking advantage of the strong gas price to rapidly reduce its net debt.

3. Enerplus Corp.

Market Cap: $3.3B

12-Month Returns: 157.4%

Enerplus Corporation (NYSE:ERF)(TSX:ERF), together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. The company's oil and natural gas properties are located primarily in North Dakota, Colorado, Pennsylvania; and Alberta, British Columbia, and Saskatchewan. 

As of December 31, 2021, the company had proved plus probable gross reserves of approximately 8.2 million barrels (MMbbls) of light and medium crude oil; 20.7 MMbbls of heavy crude oil; 299.3 MMbbls of tight oil; 56.2 MMbbls of natural gas liquids; 19.7 billion cubic feet (Bcf) of conventional natural gas; and 1,367.9 Bcf of shale gas. 

Last November, Jason Bouvier, analyst at Scotiabank,  told the Financial Post that Canadian oil producers are "essentially printing money" at current oil and gas prices, and many would still have "still ample" free cash flow, even in a scenario of a drop in WTI to US$55. 

Bouvier said that average breakeven costs for small and mid-cap companies stand at a slightly higher US$43.50 per barrel, and identified Enerplus Corp. (NYSE:ERF) as one of Canada's energy companies with the lowest capex breakevens (including hedging gains).

4. Peyto Exploration & Development Corp

Market Cap:$1.9B

12-Month Returns: 173.0%

Peyto Exploration & Development Corp. (OTCPK:PEYUF)(TSX:PEY) engages in the exploration, development, and production of oil and natural gas, and natural gas liquids in the Deep Basin of Alberta. As of December 31, 2021, the company had a total proved plus probable reserves of 904 million barrels of oil equivalent.

Last year, Peyto recorded a 121% increase in funds from operations amid a recovering natural gas market and rising production, allowing the company to hike its dividend by an impressive 1,400% from $0.04 per year to $0.60 per year.

5. Ovintiv Inc.

Market Cap: $13.8B

12-Month Returns: 130.5%

Ovintiv Inc.(NYSE:OVV)(TSX:OVV) is a Denver, Colorado-based company that, together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids. OVV was founded and headquartered in Calgary, Alberta, and was the largest energy company and largest natural gas producer in Canada before it rebranded as Ovintiv and relocated to Denver in 2019–20. 

The company operates through USA Operations, Canadian Operations, and Market Optimization segments with principal assets in the Permian in west Texas and Anadarko in west-central Oklahoma as well as Montney in northeast British Columbia and northwest Alberta. Its other upstream assets comprise Bakken in North Dakota, and Uinta in central Utah; and Horn River in northeast British Columbia, and Wheatland in southern Alberta. 

Last month, Mizuho upgraded  OVV to $78 from $54 (good for 45% upside to the current price), citing improving tailwinds.

By Alex Kimani for Oilprice.com

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https://www.yahoo.com/news/german-bosses-unions-jointly-oppose-144157457.html

German bosses, unions jointly oppose boycott of Russian gas

BERLIN (AP) — Germany's employers and unions have joined together in opposing an immediate European Union ban on natural gas imports from Russia over its invasion of Ukraine, saying such a move would lead to factory shutdowns and the loss of jobs in the bloc's largest economy.

“A rapid gas embargo would lead to loss of production, shutdowns, a further de-industrialization and the long-term loss of work positions in Germany,” said Rainer Dulger, chairman of the BDA employer's group, and Reiner Hoffmann, chairman of the DGB trade union confederation, in a joint statement Monday on Germany's dpa news agency.

The statement comes as European leaders are discussing possible new energy sanctions against Russian oil, following a decision April 7 to ban Russian coal imports beginning in August. Ukraine's leaders say revenues from Russia's energy exports are financing Moscow's destructive war on Ukraine and must be ended.

That won't be easy to do. The EU's 27 nations get around 40% of their natural gas from Russia and around 25% of their oil. Natural gas would be the most difficult do without, energy analysts say, since most of it comes by pipeline from Russia and supplies of liquefied gas, which can be ordered by ship, are limited amid strong demand worldwide.

Germany, a major manufacturing hub and an importer of Russian gas, has so far resisted an immediate shutoff and said it plans to instead phase out Russian oil by the end of the year and most Russian gas imports by mid-2024. The EU's executive commission has outlined steps to cut the consumption of Russian gas by two-thirds by year's end through using more pipeline gas from Norway and Azerbaijan, importing more liqueifed gas, accelerating the deployment of wind and solar projects and intensifying conservation efforts.

German Vice-Chancellor Robert Habeck said in an interview with the Funke media group that “an immediate gas embargo would endanger social peace in Germany.”

Despite widespread economic sanctions against Russian banks and individuals, the EU continues to send around $850 million per day to Russia for oil and gas, even as EU governments condemn the war in Ukraine. Gas-intensive companies include producers of glass, metals, ceramics and chemicals. Industry officials say natural gas would be difficult or impossible to replace in the short run.

Analysts say Russian crude oil would be easier to replace than gas but that a boycott would still lead to higher energy prices that would hit consumers who are already facing record EU inflation of 7.5%.

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-surges-but-prices-are-overbought-971316

David Becker

Published: Apr 18, 2022

Natural Gas Surges but Prices are Overbought

NG deliveries to LNG terminals continue to rise

Key Insights

• Natural gas prices surged.
• Natural gas delivered to LNG export terminals continued to rise.
• European sanctions on Russia make U.S. gas more attractive.

On Monday, natural gas prices rallied above $8 per MMBtu and were front and center on business channels. Natural gas prices hit a 13-year and closed near the day’s highs. LNG demand remains strong, and natural gas arrivals at LNG terminals rebounded to 12.74 Bcf per day.

According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal on the East Coast. Then the temperature will turn cooler during the next 8-14 days.

Technical Analysis

Natural gas prices surged above $8 and were up 10% intra-day while hitting a 13-year high. Prices rose nearly 16% last week.  Target resistance is seen near the July 2008 highs at 13.68. Support is seen near the 10-day moving average at 6.37. The entire curve to the end of 2022 is now close to $8 per MMBtu.

Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought. The fast stochastic is printing a reading of 95, above the overbought trigger level of 80. Additionally, the RSI is printing a reading of 87, above the overbought trigger level of 70.

Medium-term momentum has turned positive. The MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to an acceleration in the underlying price of natural gas.

 

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-markets-continue-to-defy-gravity-971220

Christopher Lewis

Published: Apr 18, 2022

 

Natural Gas Markets Continue to Defy Gravity

Natural gas markets have rallied significantly during the trading session again in somewhat thin trading on Monday

Natural Gas Technical Analysis

Natural gas markets have gone parabolic again during the trading session on Monday as the market continues to focus on the situation in Europe, and whether or not Europe will pay its gas bill in Russian rubles. That being said, the market continues to shoot straight up in the air as concerns about the situation in Europe getting better seem to be a major concern. Because of this, I think it is probably only a matter of time before we see some type of capitulation by the Europeans. Quite frankly, if they hang on to the idea of not paying on Russia’s terms, it could be an absolute disaster.

From a technical analysis standpoint, the breakout of the previous consolidation area does suggest that perhaps we could get as high as $9.50, but this trajectory is very difficult to grab onto. If you were to buy now, you would have to be willing to at the very least put on a $0.35 stop loss based upon a daily candlestick. This is the conundrum in this market because quite frankly it has been nothing but positive, but it is going to be difficult to simply buy this market at this extended level.

Sooner or later, something will have to come to fruition to make a longer-term decision. If we see signs of exhaustion, then it could be the beginning of the end. At this point, I would not short the market, so in theory, you should be a buyer of dips. However, what I am concerned about is the fact that the market only needs to hear that the Europeans are going to buckle, and that would send this market straight down.

[VIDEO one minute]

 

[Tom Nolan + 2,443]

https://oilprice.com/Geopolitics/International/The-LNG-Giant-Navigating-A-Geopolitical-Minefield.html

The LNG Giant Navigating A Geopolitical Minefield

By Simon Watkins - Apr 18, 2022, 6:00 PM CDT

• The Emir of Qatar’s visit to Washinton at the start of this year did a lot to relieve fears that one of the world’s largest natural gas producers was moving into China’s sphere of influence.
• Qatar appears to be determined to stay as neutral as it can when it comes to its relationships with the U.S. and China, eager to maintain its position as a leading gas provider.
• Qatar is now focused on filling as many of the supply gaps left by Russia as possible, with its ultimate goal to increase natural gas capacity to 126 million metric tons per year

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The visit at the beginning of this year of Qatar’s Emir, Sheikh Tamim bin Hamad Al Thani, to the White House, and his meeting in March with German economy minister, Robert Habeck, point to the emirate continuing to navigate a relatively neutral course between the power blocs of the U.S. and its allies on the one side, and China and its allies on the other. These visits followed concerns in Washington that a series of developments, highlighted by OilPrice.com, indicated that Qatar was shifting decisively towards the China power axis, leveraged by its key proxy in the Middle East, Iran. This course for Qatar is intended above all else to keep it out of direct conflict with either side in the ongoing struggle between the superpowers and to allow it to maintain its status as a leading gas power through its liquefied natural gas (LNG) capabilities. Given the current supply and demand dislocations in the oil and gas market, its timing is impeccable.

For a considerable time, Qatar was the number one exporter of LNG around the world based around its 6,000 square kilometer North Dome site. This site, together with the neighboring 3,700 square kilometer area of Iran’s South Pars field, comprises by far the largest non-associated natural gas field in the world. By conservatives estimates, the entire 9,700 square kilometer site holds at least 1,800 trillion cubic feet of non-associated natural gas and at least 50 billion barrels of natural gas condensates. Despite this, for a period it lost the top spot to relative newcomer Australia, which shipped an estimated 77.514 million tonnes of LNG on an annualized basis from the country’s 10 LNG projects during 2019. The figure from Australia nonetheless marked an 11.4 percent increase on the 2018 number, driven mainly by production increases at the giant Darwin-based Ichthys LNG Project, and came as a reminder to Qatar that its global competition in the LNG sector had moved up a gear. 

Qatar’s response was to announce its intention to increase its LNG production capacity by 64 percent over the next seven years, to a new target of 126 million metric tons per year (mtpy) by 2027, up from its then-capacity of around 77 million mtpy. This superseded the longstanding target of 110 mtpy (although this remained an interim target for Q4 2025), in line with the discovery of further productive layers of gas deposits attached to the main North Dome site but located about 12 kilometers onshore from the coast onshore in Ras Laffan. According to Qatar’s Energy Minister, Saad Sherida Al-Kaabi, at the time, this would allow the emirate to move ahead with engineering work on two further LNG production facilities, with a combined capacity of 16 million mtpy (‘mega-trains’). Prior to this expansion announcement, Qatar had revealed that it was already planning to build four new LNG trains. 

One key sticking point that had to be overcome in order to achieve these aims was to come to a workable accommodation with neighboring Iran on how the North Dome/South Pars site would be developed. From 2005 until the end of the first quarter of 2017 Qatar had placed a moratorium on the further development of its North Dome site in order to conserve its principal hydrocarbons (and indeed financial) resource but the resolve to continue with this self-imposed prohibition was finally removed for two key reasons. First, it was overtaken as the top global LNG exporter by Australia, and second, Qatar’s moratorium on its side of the supergiant gas field had only seemed to act as an accelerator on Iran’s development of its side of the 9,700 square kilometer site. This prompted frequent complaints from Doha that its neighbor’s no-holds-barred development of its South Pars site would damage the future recovery rate in Qatar’s own North Dome. 

Related: Mid-Cap Energy Stocks Are Outperforming Supermajors

To seek to rectify this, senior figures from Iran’s Petroleum Ministry and Qatar’s Energy Ministry began a series of meetings to agree on a new North Dome-South Pars joint development plan, as analyzed in-depth in my new book on the global oil markets. These meetings covered two main areas, a senior source who works closely with Iran’s Petroleum Ministry told OilPrice.com. “First, Iran agreed to stop the aggressive recovery tactics that it had been using along the border areas [demarcating South Pars and North Field] and second Qatar agreed to sit down with the Chinese and the Russians to discuss the future co-ordination of gas export destinations for Iranian, Qatari and Russian gas flows, marketing and pricing,” he said. “At that time, Iran and China were talking about expanding the scope of the previously agreed 25-year deal between them, and Russia was keen to ensure the smooth continuation of its own gas supplies to China [principally via the US$400 billion 30-year deal agreed in May 2014] and to ensure that Iranian gas did not take the place of Russian gas – and influence – in Europe,” he added. These talks between Qatar and Iran and the subsequent plethora of deals between Qatar and China raised questions in Washington.

These concerns had already been stoked by Qatar’s fractious relationship with key U.S. ally in the Middle East at the time, Saudi Arabia. Following the Saudi-led blockade of Qatar that ran from 2017 to 2021, the Qataris’ view of how it regards Saudi Arabia’s future is best evidenced by the fact that it pulled out of the Saudi-dominated OPEC in January 2019 after 60 years as a member. It is also a reflection of the delicate balancing act that Qatar needs to maintain between the Middle East’s two leading powers – Saudi Arabia and Iran – given not just the fact that it shares the North Dome/South Pars site with Tehran but also that it is geographically positioned directly between Saudi Arabia on its west and Iran on its east. Qatar’s negative view of Saudi Arabia is no longer an issue for the Biden White House, given that President Biden has vocally expressed a similarly dim view of Saudi Arabia, and is reflected in the fact that around the same time as the Qatari Emir’s visit to Washington in January Biden designated Qatar as a “major non-NATO ally”.

Qatar is focused now on filling as many of the gas supply gaps left as a result of Russia’s invasion of Ukraine as it can. It is still producing around 77 million mtpy and its plans for 126 million mtpy by 2027 remain in place. It is also the majority owner of the Golden Pass LNG terminal in Texas with partner ExxonMobil, with the site having an authorized export capacity of up to 18.1 million mtpy and is expected to start up in 2024. In November, Qatar placed an order for six new LNG carriers with South Korean shipyards, aimed at handling its upcoming LNG expansion. This is part of a program announced last April that saw Qatar reserve LNG carrier construction capacity at three South Korean shipyards and China’s Hudong Zhonghua shipyard through to the end of 2027 to build as many as 100 new LNG carriers in a program worth more than US$19.2 billion. 

By Simon Watkins for Oilprice.com

More Top Reads From Oilprice.com:

• The Odds Of A Nuclear Deal With Iran Are Shrinking Every Day
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[Tom Nolan + 2,443]

https://www.zerohedge.com/commodities/us-natgas-jumps-13-year-high-dwindling-supplies

US NatGas Spikes Above $8 For First Time Since 2008 As LNG Exports 'Save Europe'

by Tyler Durden

Monday, Apr 18, 2022 - 12:22 PM

US Natural gas prices surged to the highest level in 13-years on a confluence of factors, including shrinking inventory levels, strong export demand to Europe, and colder temperatures. 

Futures rose to $8.05 per million British thermal units during Asian trading, about double since the beginning of the year...

The first break above $8 since 2008...

Goldman Sachs' Ryan Voon wrote to clients on Monday that the spread between US and EU/Asia prices is beginning to narrow due to supply constraints. 

"US nat gas prices have remained below rates in EU and Asia due to shale field supply last year, but the discount has been steadily shrinking.

"Adding to the market tightness is the fact that backup US inventories held in underground caverns and aquifers are below normal for this time of year and production is holding flat," Voon wrote. 

The latest data from the Energy Information Administration showed US inventories only grew by 15 billion cubic feet in the week ended April 8, less than average for this time over the last five years. Overall stocks are 18% below seasonal levels.

Inventory woes also come as the US exports "every molecule of liquefied natural gas possible to help Europe reduce its reliance on Russian energy supplies," Bloomberg said.

For context - on an oil-barrel-equivalent basis, US NatGas is now trading at $136 (vs $109 for WTI)...

But there's a significant problem.

The US' mission to resupply Europe with LNG is taking critical supplies away from domestic markets and boosting prices sky-high, crushing American households to "save" Germans from shortages. 

Then there's the weather component. Below-average temperatures are expected across the northern U.S. between April 25 to May 1. Colder weather will drive heating demand and the need for natgas. 

The ongoing conflict in Ukraine and Western sanctions crimping Russian energy exports will further reduce the world's natgas supplies and continue pressuring prices higher. 

Based on soaring commodity prices, trends toward protectionism are rising, and it wouldn't surprise us if Americans demand a very similar approach as the rush to resupply Europe with energy products backfires.

[Tom Nolan + 2,443]

https://finance.yahoo.com/news/european-gas-falls-lowest-since-075517050.html

Bloomberg April 19

European Gas Falls to Lowest Since Russian Invasion of Ukraine

European Gas Falls to Lowest Since Russian Invasion of Ukraine

(Bloomberg) -- European natural gas extended its decline to the lowest level since the start of Russia’s war in Ukraine, amid warmer weather and signs from the Kremlin that payment for the fuel in rubles isn’t expected until next month.

Benchmark Dutch gas futures fell as much as 12% to 84 euros per megawatt hour -- the lowest level since Feb. 23, the day prior to the Russian invasion -- before paring some of those losses. The front-month contract settled 9.2% lower on April 14, ahead of the Easter holidays.

The market has been focused on shipments from Russia, its largest supplier, particularly following President Vladimir Putin’s demand last month that “unfriendly” buyers pay for gas in rubles. The European Union’s lawyers have drafted a preliminary finding that the payment mechanism would violate the bloc’s sanctions.

There is still “some time” for Europe to pay for Russian gas shipments in rubles with payments for April supplies mainly “due sometime in May,” Kremlin spokesman Dmitry Peskov said on Monday. He declined to comment on whether any customers have agreed to pay in rubles or set up accounts as mandated.

Above-average temperatures in southeast Europe are set to expand into the mid-continent next week, Maxar said in a report. That could relieve some pressure on demand for natural gas. Iberia will be colder than normal, the forecaster added.

Competition With Asia

Even before the war in Ukraine, Europe was dealing with an energy supply crunch and competing with Asia for cargoes of liquefied natural gas. Pandemic-related lockdowns are now weighing on demand in Asia.

Slightly weaker Asian LNG prices indicate the region’s buyers currently don’t need to outbid their European counterparts, analysts at consultant Engie EnergyScan said in a note.

“Gas prices have come down quite a bit as short-term fundamentals soften,” said Edmund Siau, lead analyst for gas and LNG at consultants FGE. Demand destruction and fuel switching have eased pressures on European gas prices but competition from Asia looms, he said. “Traders are wondering what Asia is going to do with China’s lockdowns and what the plan is to restock before winter,” he said.

Still, Russian gas flows via Ukraine are expected below capacity on Tuesday, after orders for supplies dropped before Easter. Gazprom PJSC has said its shipments are in line with client requests.

While gas arriving in Ukraine from Russia’s Sokhranovka network point has been relatively steady, flows from the Sudzha station have slumped in recent days. Flows via the Nord Stream link remain stable, grid data show.

Russia’s military shelled southern and eastern Ukraine overnight, with President Volodymyr Zelenskiy saying Moscow had launched a new campaign focused on conquering the eastern Donbas region.

Dutch front-month futures traded 2.2% lower at 93.50 euros per megawatt-hour by 12:02 p.m. Amsterdam time. The U.K. equivalent fell 1.9%.

U.K. day-ahead gas prices traded 43% higher at 158 pence a therm.

“A continuation of below-normal wind generation into tomorrow is offering bullish pressure to prompt U.K. energy contracts” while high LNG shipments to the U.K. are cooling futures prices, consultant Inspired Energy Plc said in a note.

Front-month German power declined as much as 6.9% to its lowest level since April 14, before paring some losses.

[Tom Nolan + 2,443]

https://finance.yahoo.com/news/china-coal-gas-boom-may-021810143.html

Bloomberg April 18

China’s Coal and Gas Boom May Help Ease The Global Energy Crisis

(Bloomberg) -- Record coal and natural gas extraction and consumption-sapping Covid lockdowns are slashing China’s import demand and helping loosen global fuel markets.

Domestic output is soaring after Beijing pressured state-owned producers to boost activity to ensure energy security after shortages last year and to insulate it from the surge in global commodity prices. Coal imports are down 24% and liquefied natural gas by 11% over the first three months of the year.

In the wake of the Russian invasion of Ukraine, a fossil-fuel production boom by the world’s largest energy importer is just what global fuel markets need. With most exporters producing at full capacity, China could be a “game changer” if it cuts back on overseas purchases, Citigroup analysts including Ed Morse said in a research note last week.

“China’s desire to walk away from seaborne coal imports by boosting domestic coal output should pose major downside risks to global fossil-fuel prices over the next few years,” Morse wrote. “China could be the only importer with large enough domestic production to make more energy supplies available globally.”

While China is well-known as the world’s biggest energy consumer, its producers are no slouches either. It mines half the world’s coal and is No. 4 and No. 6 in the rankings of global drillers of gas and oil.

Growing coal output has been an obsession of Beijing’s since a shortage of the fuel caused widespread power outages in the fall. Earlier this year, government officials set a target of increasing production capacity by 300 million tons, the same amount China typically imports annually. Output surged 15% year-on-year in March at the same time that less coal was needed for electricity generation, with thermal power output actually falling as pandemic lockdowns slowed economic activity.

“No matter how you cut it, imports are going to decrease over time,” said Xizhou Zhou, managing director for global power and renewables at S&P Global Commodity Insights. “In the short term, all these pandemic curbs are going to slow down energy demand growth, so China is likely going to play a moderating role in coal prices.”

To be sure, domestic demand for coal could come roaring back in the second half of the year if lockdowns end and China leans heavily on construction-led stimulus to spur economic growth. And it’s unclear whether the production surges are sustainable, with a top industry official saying last week that the push has reached its limits and still may not prevent a return to electricity shortages in key industrial regions.

Still, extra mine output can help not only the global coal market, where futures have more than doubled this year, but also the gas market through power plant fuel substitution. China is also increasing domestic gas production and pipeline imports, leaving more LNG supply available to be rerouted to Europe as it cuts dependence on Russian deliveries.

“We believe the reduced China LNG demand in the first quarter has contributed to the alleviation of Europe’s LNG tightness,” said Wood Mackenzie senior consultant Jingjing Du. “Moving forward, any slowdown in Chinese or Asian LNG demand will help Europe.”

[Tom Nolan + 2,443]

EU natural gas futures fell below the €90 per megawatt-hour mark, retreating to its lowest level since the start of Russia’s invasion of Ukraine, amid ongoing steady supplies. Orders for gas transit via Ukraine and the Nord Stream 1 pipeline were steady, despite an increase in eastward flows in the Yamal-Europe pipeline, while the end of some outages in Norway also boosted deliveries. Regarding liquified natural gas supplies, US exports to the region remained robust, and prospects of subdued demand in Asia should keep the fleet of LNG tanker ships interested in the European ports. Meanwhile, concerns over ruble payments for Russian gas faded after Putin told Austrian Chancellor Karl Nehammer that Russia would continue to supply natural gas, even if payments were made in euros. The contract is now trading roughly 75% below a record high of €345 hit in March.

https://tradingeconomics.com/commodity/eu-natural-gas

[Tom Nolan + 2,443]

EXCERPT

Russia's Gazprom has not booked gas transit capacity via Yamal-Europe pipeline for May.

https://www.zerohedge.com/markets/newsquawk-us-market-open-equities-are-negative-across-board-yields-climb-while-usdjpy-soars