"Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas

[Tom Nolan + 2,443]

https://www.zerohedge.com/markets/why-russian-lng-exports-europe-exploded-summer

Why Russian LNG Exports To Europe Exploded This Summer

by Tyler Durden

Thursday, Oct 27, 2022 - 02:30 AM

By Alex Kimani of OilPrice.com

Whereas supplies of Russian pipeline gas--the bulk of Europe’s gas imports before the Ukraine war--are down to a trickle, Europe has been hungrily scooping up Russian LNG.

https://oilprice.com/Energy/Energy-General/Why-Russian-LNG-Exports-To-Europe-Exploded-This-Summer.html

Why Russian LNG Exports To Europe Exploded This Summer

By Alex Kimani - Oct 26, 2022, 11:00 AM CDT

• Europe has been working hard to wean itself off Russian energy commodities ever since the latter invaded Ukraine.
• Supply of piped gas from Russia to Europe has plunged since the beginning of this year.
• Surprisingly, European imports of Russian liquefied natural gas jumped by 41% Y/Y in the year through August.

Join Our Community

Whereas supplies of Russian pipeline gas--the bulk of Europe’s gas imports before the Ukraine war--are down to a trickle, Europe has been hungrily scooping up Russian LNG Europe has been working hard to wean itself off Russian energy commodities ever since the latter invaded Ukraine. The European Union has banned Russian coal and plans to block most Russian oil imports by the end of 2022 in a bid to deprive Moscow of an important source of revenue to wage its war in Ukraine.

But ditching Russian gas is proving to be more onerous than Europe would have hoped for. Whereas supplies of Russian pipeline gas--the bulk of Europe’s gas imports before the Ukraine war--are down to a trickle, Europe has been hungrily scooping up Russian LNG. The Wall Street Journal has reported that the bloc’s imports of Russian liquefied natural gas jumped by 41% Y/Y in the year through August.

“Russian LNG has been the dark horse of the sanctions regime,” Maria Shagina, research fellow at the London-based International Institute for Strategic Studies, has told WSJ. Importers of Russian LNG to Europe have argued that the shipments are not covered by current EU sanctions and that buying LNG from Russia and other suppliers has helped keep European energy prices in check.

Source: WSJ

LNG Deluge

Maybe Europe’s LNG imports from Russia can be justified on a purely economic basis.

Natural gas prices in Europe have plunged over the past few weeks with CNBC reporting that a  “Wave of LNG tankers is overwhelming Europe in an energy crisis and hitting natural gas prices.” According to MarineTraffic via CNBC, 60 LNG tankers, or  ~10% of the LNG vessels in the world, are currently sailing or anchored around Northwest Europe, the Mediterranean, and the Iberian Peninsula. Such vessels are considered floating LNG storage since they cannot unload, something that is impacting the price of natural gas and freight rates.

Related: Oil Stocks Are Increasingly Disconnected From Prices

It’s a fair bet that a good chunk of those vessels originated from the United States.

Europe’s natural gas demand has skyrocketed as the EU tries to lower its reliance on Russian natural gas following its invasion of Ukraine. Europe has displaced Asia as the top destination for the U.S. LNG, and now receives 65% of total exports. The EU has pledged to reduce its consumption of Russian natural gas by nearly two-thirds before the year’s end while Lithuania, Latvia and Estonia have vowed to eliminate Russian gas imports outright. Unlike pipeline gas, supercooled LNG is much more flexible and can be shipped from far-flung regions, including the U.S. and Qatar. 

Europe is not alone here. Shipping data has revealed that China has imported nearly 30% more gas from Russia so far this year, typically at a steep discount.

Thankfully, there’s a clear upside to imports of Russian LNG to Europe: the continent  has managed to fill its gas stores well ahead of schedule, with Reuter’s gas meter revealing that 93.8% of the EU gas storage is currently filled.

Financing Putin’s war machine

Still, it’s hard to argue that buying Russian LNG even in relatively small quantities is not playing a part in financing Putin’s war machine. Although Russian LNG has accounted for just 8% of the European Union and U.K.’s gas imports since the start of March, the trade runs counter to the EU’s efforts to deprive Russia of fossil-fuel revenue.

A lot of blame falls on Switzerland, with 80% of Russian raw materials traded via the Central European nation and its nearly 1,000 commodity firms. Switzerland is an important global financial hub with a thriving commodities sector despite the country being far from all the global trade routes and without access to the sea;  no former colonial territories and without any significant raw materials of its own. In fact, Oliver Classen, media officer at the Swiss NGO Public Eye, says that "this sector accounts for a much larger part of the GDP in Switzerland than tourism or the machinery industry." According to a 2018 Swiss government report, commodity trading volume reaches almost $1 trillion ($903.8 billion). 

Deutsche Welle has reported that 80% of Russian raw materials are traded via Switzerland, according to a report by the Swiss embassy in Moscow. About a third of it are oil and gas while two-thirds are base metals such as zinc, copper and aluminum. In other words, deals signed on Swiss desks are directly facilitating Russian oil and gas to continue flowing freely.

This definitely is a big deal considering that gas and oil exports are the main source of income for Russia, accounting for 30 to 40% of the Russian budget. In 2021, Russian state corporations earned around $180 billion (€163 billion) from oil exports alone.

Again, unfortunately, Switzerland has been handling its commodities trade with kid gloves.

According to DW, raw materials are often traded directly between governments and via commodities exchanges. However, they can also be traded freely, and Swiss companies have specialized in direct sales thanks to an abundance of capital.

In raw materials transactions, Swiss commodity traders have adopted letters of credits or L/Cs as their prefered instruments. A bank will give a loan to a trader and as collateral receive a document making it the owner of the commodity. As soon as the buyer pays the bank, the document and thus ownership of the commodity are transferred to him/her. What this does, in effect, is grant traders more credit without checking their creditworthiness, while the banks get the commodity value as security.

This is a prime example of transit trade, where only the money flows through Switzerland but actual raw materials usually do not touch Swiss soil. Thus, no details about the magnitude of the transaction land on the desk of the Swiss customs authorities leading to highly imprecise information about the flow volumes of raw materials. 

"The whole commodities trade is under-recorded and underregulated. You have to dig around to collect data and not all information is available," Elisabeth Bürgi Bonanomi, a senior lecturer in law and sustainability at Bern University, has told DW.

Obviously, the lack of regulation is very appealing to commodity traders--especially those that deal with raw materials mined in non-democratic countries such as the DRC.

 "Unlike the financial market, where there are rules for tackling money laundering and illegal or illegitimate financial flows, and a financial market supervisory authority, there is currently no such thing for commodity trading," financial and legal expert at Public Eye David Mühlemann told the German broadcaster ARD.

But don’t expect things to change any time soon.

Calls for a supervisory body for the commodities sector based on the model of the one for the financial market by the likes of Swiss NGO Public Eye and Swiss Green Party proposal have so far failed to bear fruit. Thomas Mattern from the Swiss People's Party (SVP) has spoken out against such a move, insisting that Switzerland should retain its neutrality, "We do not need even more regulation, and not in the commodities sector either."

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

• Saudi Minister Says Sour Relations With The U.S. Will Improve
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[Tom Nolan + 2,443]

Natural Gas Prices Slump But Europe Can’t Afford To Be Complacent

By Irina Slav - Oct 27, 2022, 9:00 AM CDT

• Natural gas prices in Europe are plummeting as storage nears capacity due to unseasonably warm weather across the continent.
• While the price drop will be welcomed by European leaders, demand is likely to climb across winter and the supply issues have not changed.
• With storage nearing its limit, European countries may have to pay a premium for floating storage which would add to the cost of LNG carriers.

Join Our Community

Gas prices in Europe are plummeting amid unseasonably warm weather across Europe and as storage fills up to capacity. This has no doubt prompted a sigh of relief in government circles, but celebrating a mild winter in October would be premature.

Reuters’ John Kemp noted in a recent column that complacency is the last thing European leaders want to be right now, even as gas prices drop and inventories rise to near-record levels.

Kemp recalled that in Germany, heating season started earlier than usual this year, amid a colder than usual September, suggesting the weather is not something to base your hopes and plans on.

Bloomberg, on the other hand, quoted an analyst and meteorologist from an Italian energy company as saying that “The European gas glut is expected to last until at least December. It is unlikely Europe will see a prolonged cold spell in November.”

That may or may not come true but average temperatures in Europe for November over the past 30 years or so show numbers that normally require heating, especially at the minimum end of the daily range.

Whether Europe gets a mild winter or a normal one - let alone a colder-than-usual winter - it will not be able to avoid heating season. And heating season is why the gas storage ramp-up at any cost has been priority number one for European governments.

Reuters’ Kemp reports that to date, the EU as a whole has filled its storage caverns to 93.6 percent of maximum capacity, which is the third-highest fill rate on record - and it’s set to keep increasing.

Yet once storage is full, it’s full, and you cannot add more to it. This is when Europe’s gas storage turns into a constraint. The constraint can be circumvented with floating storage, which is what is already happening. Reuters reported earlier this month that LNG tankers were idling off the coast of Spain and the UK, waiting to unload or waiting for prices to go higher.

However, floating storage is not the cheapest way to store LNG, especially when there’s a shortage of LNG carriers. So, if European gas buyers decide to store additional LNG on the tankers that carry it to Europe, the total gas bill will balloon further from already record levels.

The drop in gas prices, then, is not really as consequential an event as European leaders would like everyone to believe. October in Europe, especially recently, has tended to be milder than it used to be a couple of decades ago.

This has not meant, however, that the warm weather has stayed around until March the next year. December is always cold and so is January, although last February was unseasonably warm in some parts of Europe. But then March was unseasonably cold. One really cannot base their energy consumption plans on the best-case weather scenario.

This would be particularly risky in light of warnings from the International Energy Agency that the winter of 2023 could well be even more difficult for Europe because this year, it had six months of normal Russian gas supply. It won’t have that in 2023. And it would need to re-fill its storage once again after the heating season is over.

Analysts are also warning that this winter is more of a trailer than the whole movie about Europe’s gas troubles. With limited U.S. LNG production capacity and equally limited options for additional supply from other parts of the world such as Mozambique, Europe is facing an extended supply crunch that puts demand reduction front and center. Europe looks like it will need to learn to consume less energy for more than a couple of months.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Colombia Is On The Brink Of An Energy Crisis
• Biden Just Put A Floor Under Oil. Will It Work?
• Oil Holds Gains Despite Crude Inventory Build

https://oilprice.com/Energy/Energy-General/Natural-Gas-Prices-Slump-But-Europe-Cant-Afford-To-Be-Complacent.html

[Blackbag99 + 20]

13 minutes ago, Tom Nolan said:

https://www.zerohedge.com/markets/why-russian-lng-exports-europe-exploded-summer

Why Russian LNG Exports To Europe Exploded This Summer

by Tyler Durden

Thursday, Oct 27, 2022 - 02:30 AM

By Alex Kimani of OilPrice.com

Whereas supplies of Russian pipeline gas--the bulk of Europe’s gas imports before the Ukraine war--are down to a trickle, Europe has been hungrily scooping up Russian LNG.

https://oilprice.com/Energy/Energy-General/Why-Russian-LNG-Exports-To-Europe-Exploded-This-Summer.html

Why Russian LNG Exports To Europe Exploded This Summer

By Alex Kimani - Oct 26, 2022, 11:00 AM CDT

• Europe has been working hard to wean itself off Russian energy commodities ever since the latter invaded Ukraine.
•  

 

Russian gas is Gone, Nada, nowt, zilch! Since June 30th.

Quite frankly Russia had been cutting imports to Europe at this point last year. And Russian imports prior to Ukranian invasion were at there lowest levels in 20 years.

Russian gas to the EU is gone! Full stop end of story. There is no future price shock to be had.

Fundamentals say that the gas market is well supplied. And could lose 70% of value from here (Based on historical valuations).

Better to dump than pump!

[Blackbag99 + 20]

26 minutes ago, Tom Nolan said:

Natural Gas Prices Slump But Europe Can’t Afford To Be Complacent

By Irina Slav - Oct 27, 2022, 9:00 AM CDT

• Natural gas prices in Europe are plummeting as storage nears capacity due to unseasonably warm weather across the continent.
• While the price drop will be welcomed by European leaders, demand is likely to climb across winter and the supply issues have not changed.
• With storage nearing its limit, European countries may have to pay a premium for floating storage which would add to the cost of LNG carriers.

Join Our Community

Gas prices in Europe are plummeting amid unseasonably warm weather across Europe and as storage fills up to capacity. This has no doubt prompted a sigh of relief in government circles, but celebrating a mild winter in October would be premature.

Reuters’ John Kemp noted in a recent column that complacency is the last thing European leaders want to be right now, even as gas prices drop and inventories rise to near-record levels.

Kemp recalled that in Germany, heating season started earlier than usual this year, amid a colder than usual September, suggesting the weather is not something to base your hopes and plans on.

Bloomberg, on the other hand, quoted an analyst and meteorologist from an Italian energy company as saying that “The European gas glut is expected to last until at least December. It is unlikely Europe will see a prolonged cold spell in November.”

That may or may not come true but average temperatures in Europe for November over the past 30 years or so show numbers that normally require heating, especially at the minimum end of the daily range.

Whether Europe gets a mild winter or a normal one - let alone a colder-than-usual winter - it will not be able to avoid heating season. And heating season is why the gas storage ramp-up at any cost has been priority number one for European governments.

Reuters’ Kemp reports that to date, the EU as a whole has filled its storage caverns to 93.6 percent of maximum capacity, which is the third-highest fill rate on record - and it’s set to keep increasing.

Yet once storage is full, it’s full, and you cannot add more to it. This is when Europe’s gas storage turns into a constraint. The constraint can be circumvented with floating storage, which is what is already happening. Reuters reported earlier this month that LNG tankers were idling off the coast of Spain and the UK, waiting to unload or waiting for prices to go higher.

However, floating storage is not the cheapest way to store LNG, especially when there’s a shortage of LNG carriers. So, if European gas buyers decide to store additional LNG on the tankers that carry it to Europe, the total gas bill will balloon further from already record levels.

The drop in gas prices, then, is not really as consequential an event as European leaders would like everyone to believe. October in Europe, especially recently, has tended to be milder than it used to be a couple of decades ago.

This has not meant, however, that the warm weather has stayed around until March the next year. December is always cold and so is January, although last February was unseasonably warm in some parts of Europe. But then March was unseasonably cold. One really cannot base their energy consumption plans on the best-case weather scenario.

This would be particularly risky in light of warnings from the International Energy Agency that the winter of 2023 could well be even more difficult for Europe because this year, it had six months of normal Russian gas supply. It won’t have that in 2023. And it would need to re-fill its storage once again after the heating season is over.

Analysts are also warning that this winter is more of a trailer than the whole movie about Europe’s gas troubles. With limited U.S. LNG production capacity and equally limited options for additional supply from other parts of the world such as Mozambique, Europe is facing an extended supply crunch that puts demand reduction front and center. Europe looks like it will need to learn to consume less energy for more than a couple of months.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Colombia Is On The Brink Of An Energy Crisis
• Biden Just Put A Floor Under Oil. Will It Work?
• Oil Holds Gains Despite Crude Inventory Build

https://oilprice.com/Energy/Energy-General/Natural-Gas-Prices-Slump-But-Europe-Cant-Afford-To-Be-Complacent.html

I doubt they are using floating storage as an option. Just that there is nowhere to put it.

You can see it in the Dutch market. They are not adding more gas. Which means that the UK has no export options as their storage is full. The Dutch market is the only real output for UK gas, you might have to accept that imports of LNG might decrease rapidly.

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/US-LNG-Cannot-Replace-The-Russian-Natural-Gas-That-Europe-Has-Lost.html

U.S. LNG Cannot Replace The Russian Natural Gas That Europe Has Lost

By Tsvetana Paraskova - Oct 28, 2022, 3:07 AM CDT

• Europe has relied on U.S. LNG imports to offset the loss of Russian gas, with nearly 70% of U.S. LNG exports heading to Europe in September.
• In the long term, Europe will have to find other sources of natural gas as its inventories are likely to drain over the upcoming winter.
• Ultimately, Europe will have to reduce demand for natural gas going forward as there is very little available supply left.

Join Our Community

Europe cannot rely solely on imports of U.S. LNG to offset the pipeline gas supply it will have lost from Russia when it starts rebuilding inventories after the end of this winter, according to BloombergNEF.

So far this year, American LNG has been crucial in meeting demand in Europe, which is scrambling for gas supply and willing to pay up for spot deliveries, outbidding most of Asia.

The United States is shipping record volumes of LNG to Europe to help EU allies and nearly 70% of all American LNG exports were headed to Europe in September, according to Refinitiv Eikon data cited by Reuters.  

However, the significant drop in Russian gas supply this year occurred only in June, meaning that Europe could still stock up on some Russian gas earlier this year.

Ahead of the 2023/2024 winter, however, the gap in gas supply in Europe will be much wider without Russian gas. Europe will not be importing much Russian gas—or none at all if Russia cuts off deliveries via the one link left operational via Ukraine and via TurkStream—compared to relatively stable imports from Russia in the first half of this year, before Moscow started gradually cutting volumes via Nord Stream in June until shutting down the pipeline in early September.

“The year-on-year increase is not sufficient to offset a total cut in Russian piped supply with under half of these volumes met by LNG increases,” BNEF analyst Arun Toora said.

“The good news is that Russia looks close to having played its last card in terms of gas leverage over Europe. However Europe’s challenges will not disappear with the daffodils next spring,” London-based consultancy Timera Energy said in a winter gas market outlook at the beginning of October.

Without most of the Russian gas supply, Europe will likely need to offset around 40 bcm of additional lost Russian flows next year. LNG alone cannot meet this volume, considering a lack of new global liquefaction capacity in the short-term, including in the U.S., limited further demand elasticity in Asia, and European regasification capacity constraints. Therefore, European demand will need to fall, Timera Energy said.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Biden’s Plan To Refill The SPR Is Unlikely To Boost U.S. Oil Output
• Colombia Is On The Brink Of An Energy Crisis
• Biden Just Put A Floor Under Oil. Will It Work?

[Ron Wagner + 709]

On 10/27/2022 at 9:11 AM, Tom Nolan said:

Natural Gas Prices Slump But Europe Can’t Afford To Be Complacent

By Irina Slav - Oct 27, 2022, 9:00 AM CDT

• Natural gas prices in Europe are plummeting as storage nears capacity due to unseasonably warm weather across the continent.
• While the price drop will be welcomed by European leaders, demand is likely to climb across winter and the supply issues have not changed.
• With storage nearing its limit, European countries may have to pay a premium for floating storage which would add to the cost of LNG carriers.

Join Our Community

Gas prices in Europe are plummeting amid unseasonably warm weather across Europe and as storage fills up to capacity. This has no doubt prompted a sigh of relief in government circles, but celebrating a mild winter in October would be premature.

Reuters’ John Kemp noted in a recent column that complacency is the last thing European leaders want to be right now, even as gas prices drop and inventories rise to near-record levels.

Kemp recalled that in Germany, heating season started earlier than usual this year, amid a colder than usual September, suggesting the weather is not something to base your hopes and plans on.

Bloomberg, on the other hand, quoted an analyst and meteorologist from an Italian energy company as saying that “The European gas glut is expected to last until at least December. It is unlikely Europe will see a prolonged cold spell in November.”

That may or may not come true but average temperatures in Europe for November over the past 30 years or so show numbers that normally require heating, especially at the minimum end of the daily range.

Whether Europe gets a mild winter or a normal one - let alone a colder-than-usual winter - it will not be able to avoid heating season. And heating season is why the gas storage ramp-up at any cost has been priority number one for European governments.

Reuters’ Kemp reports that to date, the EU as a whole has filled its storage caverns to 93.6 percent of maximum capacity, which is the third-highest fill rate on record - and it’s set to keep increasing.

Yet once storage is full, it’s full, and you cannot add more to it. This is when Europe’s gas storage turns into a constraint. The constraint can be circumvented with floating storage, which is what is already happening. Reuters reported earlier this month that LNG tankers were idling off the coast of Spain and the UK, waiting to unload or waiting for prices to go higher.

However, floating storage is not the cheapest way to store LNG, especially when there’s a shortage of LNG carriers. So, if European gas buyers decide to store additional LNG on the tankers that carry it to Europe, the total gas bill will balloon further from already record levels.

The drop in gas prices, then, is not really as consequential an event as European leaders would like everyone to believe. October in Europe, especially recently, has tended to be milder than it used to be a couple of decades ago.

This has not meant, however, that the warm weather has stayed around until March the next year. December is always cold and so is January, although last February was unseasonably warm in some parts of Europe. But then March was unseasonably cold. One really cannot base their energy consumption plans on the best-case weather scenario.

This would be particularly risky in light of warnings from the International Energy Agency that the winter of 2023 could well be even more difficult for Europe because this year, it had six months of normal Russian gas supply. It won’t have that in 2023. And it would need to re-fill its storage once again after the heating season is over.

Analysts are also warning that this winter is more of a trailer than the whole movie about Europe’s gas troubles. With limited U.S. LNG production capacity and equally limited options for additional supply from other parts of the world such as Mozambique, Europe is facing an extended supply crunch that puts demand reduction front and center. Europe looks like it will need to learn to consume less energy for more than a couple of months.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Colombia Is On The Brink Of An Energy Crisis
• Biden Just Put A Floor Under Oil. Will It Work?
• Oil Holds Gains Despite Crude Inventory Build

https://oilprice.com/Energy/Energy-General/Natural-Gas-Prices-Slump-But-Europe-Cant-Afford-To-Be-Complacent.html

More FLNG is the answer for the next two or three years. Each year will be better. This will spur growth in LNG production worldwide. Russian gas will not go to waste but will be sold for less than what Putin wanted to extort from Europe. 

[Ron Wagner + 709]

14 hours ago, Tom Nolan said:

https://oilprice.com/Energy/Energy-General/US-LNG-Cannot-Replace-The-Russian-Natural-Gas-That-Europe-Has-Lost.html

U.S. LNG Cannot Replace The Russian Natural Gas That Europe Has Lost

By Tsvetana Paraskova - Oct 28, 2022, 3:07 AM CDT

• Europe has relied on U.S. LNG imports to offset the loss of Russian gas, with nearly 70% of U.S. LNG exports heading to Europe in September.
• In the long term, Europe will have to find other sources of natural gas as its inventories are likely to drain over the upcoming winter.
• Ultimately, Europe will have to reduce demand for natural gas going forward as there is very little available supply left.

Join Our Community

Europe cannot rely solely on imports of U.S. LNG to offset the pipeline gas supply it will have lost from Russia when it starts rebuilding inventories after the end of this winter, according to BloombergNEF.

So far this year, American LNG has been crucial in meeting demand in Europe, which is scrambling for gas supply and willing to pay up for spot deliveries, outbidding most of Asia.

The United States is shipping record volumes of LNG to Europe to help EU allies and nearly 70% of all American LNG exports were headed to Europe in September, according to Refinitiv Eikon data cited by Reuters.  

However, the significant drop in Russian gas supply this year occurred only in June, meaning that Europe could still stock up on some Russian gas earlier this year.

Ahead of the 2023/2024 winter, however, the gap in gas supply in Europe will be much wider without Russian gas. Europe will not be importing much Russian gas—or none at all if Russia cuts off deliveries via the one link left operational via Ukraine and via TurkStream—compared to relatively stable imports from Russia in the first half of this year, before Moscow started gradually cutting volumes via Nord Stream in June until shutting down the pipeline in early September.

“The year-on-year increase is not sufficient to offset a total cut in Russian piped supply with under half of these volumes met by LNG increases,” BNEF analyst Arun Toora said.

“The good news is that Russia looks close to having played its last card in terms of gas leverage over Europe. However Europe’s challenges will not disappear with the daffodils next spring,” London-based consultancy Timera Energy said in a winter gas market outlook at the beginning of October.

Without most of the Russian gas supply, Europe will likely need to offset around 40 bcm of additional lost Russian flows next year. LNG alone cannot meet this volume, considering a lack of new global liquefaction capacity in the short-term, including in the U.S., limited further demand elasticity in Asia, and European regasification capacity constraints. Therefore, European demand will need to fall, Timera Energy said.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Biden’s Plan To Refill The SPR Is Unlikely To Boost U.S. Oil Output
• Colombia Is On The Brink Of An Energy Crisis
• Biden Just Put A Floor Under Oil. Will It Work?

No, the USA cannot but there is a very big world out there and more natural gas than you can imagine. Also check out the price of ethanol. There are many other options out there. Right now Germany is paying for its lack of LNG infrastructure. More pipelines are being built to serve Europe also. FLNG is the quickest way to solve the immediate problem and is well underway. Lots of ships need to unload their LNG. 

[Tom Nolan + 2,443]

Oct 31 Monday early morning U.S.  - https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-sharply-higher-on-increased-lng-demand-1179697

Natural Gas Price Fundamental Daily Forecast – Sharply Higher on Increased LNG Demand

By:James Hyerczyk

Published: Oct 31, 2022, 08:02 CDT•2min read

The market is higher on the news of the return to service from maintenance of the Cove Point LNG export plant in Maryland.

Natural gas futures are trading sharply higher on Monday, in a move that suggests the weather conditions over the weekend may have shifted to the cooler side. This follows the 3% drop on Friday that was fueled by forecasts calling for mild weather and low heating demand through mid-November.

At 12:28 GMT, December natural gas futures are trading $6.302, up $0.618 or +10.87%. On Friday, the United States Natural Gas Fund ETF (UNG) settled at $18.70, down $0.21 or -1.11%.

Traders could also be reacting to the news of the return to service from maintenance of Berkshire Hathaway Energy’s 0.8 billion cubic feet per day (bcfd) Cove Point liquefied natural gas (LNG) export plant in Maryland. This event is expected to boost U.S. demand for gas for exports.

Traders are also monitoring the events surrounding the return of Freeport LNG’s export plant in Texas. Freeport has said it expects the facility to return to at least partial service in early- to mid-November following an unexpected shutdown on June 8 due to a pipeline explosion.

Refinitiv Supply/Demand Outlook

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.5 bcfd so far in October, up from a monthly record of 99.4 in September.

Meanwhile with the coming of seasonally cooler weather, Refinitiv projected average U.S. gas demand, including exports, would rise from 94.3 bcfd this week to 97.0 bcfd next week and 101.6 bcfd in two weeks. The forecast for this week jumped due to the expected rise in LNG exports with the return of Cove Point.

Short-Term Weather Forecast

According to NatGasWeather for October 31 to November 3, “The southern and eastern U.S. will be comfortable with highs of 60s to 80s, while the West & Plains remain cool as weather systems track through with rain, snow, and highs of 40s to 60s.

National demand is expected to be very light this week with the Eastern 2/3 of the U.S. warmer than normal, while the West remains cool.

Daily Forecast

Keep an eye on U.S. LNG exports this week as Cove Point returns to service. This could give natural gas a much needed boost throughout the week.

The average amount of gas flowing to U.S. LNG export plants fell to 11.2 bcfd in October due to the Cove Point outage, down from 11.5 bcfd in September and well below the monthly record of 12.9 bcfd in March.

This figure could jump this week, giving natural gas a much needed boost. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG so there is plenty of room for improvement.

For a look at all of today’s economic events, check out our economic calendar.

[Tom Nolan + 2,443]

Monday Oct 31 Reuters

https://finance.yahoo.com/news/u-regulators-want-more-data-150322137.html

U.S. regulators want more data on Texas Freeport LNG plant before restart

Oct 31 (Reuters) - U.S. federal regulators have told Freeport LNG to provide information needed for the planned restart of its liquefied natural gas (LNG) export plant in Texas, the second-largest U.S. LNG export plant, as soon as possible to allow sufficient time for review.

Freeport shut on June 8 due to a pipeline explosion. The company has said it expects the 2.1-billion cubic feet per day plant to return to at least partial service in early- to mid-November.

The U.S. Federal Energy Regulatory Commission (FERC) said it participated in a call on Oct. 27 with the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) and Freeport LNG to discuss "ongoing damage assessments, repair work plans and plans for restart."

On that call, FERC said both FERC and PHMSA reiterated the need for Freeport to provide "the status and schedule of implementing the findings, recommendations, and lessons learned resulting from the root cause investigation and assessments" as soon as possible to allow sufficient review time.

Freeport cannot restart without regulatory approval.

At least four vessels were already lined up to pick up LNG at Freeport, according to Refinitiv data. Prism Brilliance and Prism Diversity were waiting off the coast from the plant, while Prism Courage was expected to arrive on Nov. 1 and Grace Freesia on Nov. 27.

The closely held company aims to restore more than 85% of pre-fire processing capacity next month and complete repairs to bring the facility back to 100% by March.

The plant's restart will provide needed fuel for heating and power as winter descends on the Northern Hemisphere.

Global LNG prices have cooled with Europe's gas storage levels rising to around 95% of capacity. Prices at the Dutch hub this week fell to $27 per million British thermal units, the lowest level since June. (Reporting by Scott DiSavino; Editing by Andrea Ricci)

[Tom Nolan + 2,443]

Sunday Oct 30 - Permian Basin - Odessa American

https://www.yahoo.com/news/epa-hangs-regulatory-ax-over-000700916.html

EPA hangs regulatory ax over Basin

Oct. 30—State Rep. Brooks Landgraf and the Texas Oil & Gas Association say the U.S. Environmental Protection Agency is way out of line with its threat to designate the Permian Basin a non-attainment zone and curtail its oil and natural gas production.

A spokeswoman for the EPA in Washington, D.C., responds that her agency will proceed with the tedious designation process.

[ARTICLE CONTINUES]

[Tom Nolan + 2,443]

US natural gas futures soared 10% to above $6.2/MMBtu on Monday, the highest in two weeks due to a rebound in LNG exports and expectations of higher domestic demand. Average US gas demand, including exports, is set to rise to 101.2 bcfd next week, from 98.3 bcfd this week. Berkshire Hathaway Energy's Cove Point LNG plant in Maryland returned to operations on October 28th after a month-long maintenance while the Freeport plant in Texas is set to at least partially resume production in early to mid-November. Meanwhile, the latest weather forecast from Maxar’s Weather Desk was showing colder trends day/day for the eastern half of the Lower 48 from November 10-14th.

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

Natural gas futures linked to TTF, Europe's wholesale gas price, were around €130 per megawatt-hour on the last day of October, after hitting five-month lows early in the month. Natural gas prices remain less than a third of their summer peak of €339, prompted by milder than usual weather which is likely to hold until mid-November, high flows of LNG and a strong storage built. Still, natural gas prices remain twice the $65 per megawatt-hour seen in October of 2021, and it is just a matter of time until temperatures start falling and demand gets a boost. Also, concerns start to increase about reserves for next year as Russian gas flows via the Nord Stream 1 remained at zero and there is a risk remaining flows via Ukraine and TurkStream are halted. At the same time, there are constraints to how much more LNG Europe can import and global competition for LNG could also attract cargoes to other markets.

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

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/How-Record-US-Gas-Exports-Could-Fuel-The-Energy-Transition.html

How Record U.S. Gas Exports Could Fuel The Energy Transition

By Irina Slav - Oct 31, 2022, 11:00 AM CDT

• Climbing domestic natural gas prices could accelerate the energy transition in the United States.
• It is Europe that is changing the price environment for natural gas on a global scale.
• Rystad Energy: on an LCOE base, solar is now 10 times cheaper to build in Europe than new natural gas generation capacity.

Join Our Community

The United States has been exporting natural gas at record levels this year, with exporters making big profits on it and expected to continue making big profits because of Europe’s continued demand for the commodity. Yet prices at home have begun to climb higher, too, because natural gas production is growing at a much lower rate than exports. One team of analysts warned as early as the beginning of this year that eventually, U.S. gas prices and global gas prices will converge. For some, this would be good news.

Right now, the gas supply and demand situation looks more or less under control. Prices at home are down significantly, and exports are not rising as fast as they were in early 2022 because Europe’s storage facilities are full.

Meanwhile, over the first ten months of the year, U.S. LNG exporters shipped 11 percent more of the commodity abroad, with exports to Europe soaring by 150 percent, according to data from Kpler cited by Reuters.

It is Europe that is changing the price environment for natural gas on a global scale because Russian pipeline gas is not coming back anytime soon, while Europe has a long way to go to wean itself off natural gas as a whole. This means it will need even more U.S. LNG next year—this year, it had Russian gas until June. And this means that prices for gas at home will go higher because production will continue lagging behind demand.

According to Reuters’s Gavin Maguire, this could stimulate the transition to alternative energy sources based on their economics. On a levelized cost of electricity basis, he wrote, some forms of low-carbon energy, such as solar and onshore wind, are already much cheaper than natural gas power plants.

Related: Deep OPEC Output Cuts Upend Biden’s Attempt To Lower Oil Prices

Indeed, Norwegian energy consultancy Rystad Energy also estimated that solar in particular, is now 10 times cheaper to build in Europe than new natural gas generation capacity. Again, on a levelized cost of electricity basis.

The concept of LCOE is the basis normally used as a basis for the promotion of wind and solar as opposed to fossil fuel generation capacity. However, many critics oppose the use of this metric because it can be quite misleading.

First, the LCOE overlooks certain costs that are present in reality. Second, it assumes a certain level of electricity production that may or may not materialize because, ultimately, the output of wind and solar depends on the weather, and the weather is not exactly a reliable, immutable factor. Thirdly and perhaps most importantly, LCOE does not account for the backup baseload capacity necessary for every MW of wind or solar.

In other words, building more wind and solar capacity might actually end up necessitating the construction of more gas-powered plants to be used as a backup during the night for solar, or on windless days, for wind.

This is where federal subsidies for renewable energy come in. These could go a long way towards making wind and solar more economical than gas and coal generation. Yet the need for backup capacity will remain, meaning the demand for gas will remain. And this would make the situation with gas prices and electricity affordability even more complicated in the United States.

“Asian and European natural gas prices stand at $35 per mmbtu, versus $8.20 per mmbtu here in the United States. Given the underlying fundamentals that have now developed in US gas markets, we believe prices are about to surge and converge with international prices within the next six months,” investment firm Goehring & Rozencwajg said in May this year.

So far, prices haven’t surged that high for various reasons, notably the pipeline shortage in Texas that pushed gas prices to zero earlier this month. A glut of LNG tankers in Europe also affected short-term prices, as did warmer-than-usual October weather across Europe. Yet demand for gas remains robust and will only increase as winter begins—and it is about to begin, for real.

Interestingly, investment banks seem to expect prices to remain relatively low next year, with Goldman forecasting an average of $5 per million British thermal units and Bank of America seeing it at $4.50 per mmBtu. This year’s price jumped because of record exports. Next year, this record will be broken if Europe continues to rely on U.S. LNG, which it will, for lack of alternatives.

Yet even if the banks turn out to be right and U.S. gas prices remain below this year’s average, which so far has been $6.60 per mmBtu, it would be a significant increase on gas prices from the past few years. On its own, this may not be enough to motivate a lot more wind or solar capacity. Federal subsidies, however, are another matter. They would certainly help the energy transition in the U.S., whatever the price of gas.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• China Could Help Ease The Global Fuel Crisis
• 3 Oil Stocks Flying Under The Radar After OPEC+ Cuts
• Colombia’s Oil Industry In Jeopardy As Cocaine Production Soars To New Record

[Tom Nolan + 2,443]

https://www.yahoo.com/finance/news/japan-urges-population-restrain-power-020859503.html

BLOOMBERG Oct 30

Japan Urges Population to Restrain Power Use This Winter

...The resource-scant nation suffers from a lack of capacity to generate electricity, and the surge in prices for liquefied natural gas combined with the weak yen have made it costly to procure fuel....

[Tom Nolan + 2,443]

Monday evening Oct 31

US natural gas futures soared 10% to above $6.2/MMBtu on Monday, the highest in two weeks due to a rebound in LNG exports and expectations of higher domestic demand. Average US gas demand, including exports, is set to rise to 101.2 bcfd next week, from 98.3 bcfd this week. Berkshire Hathaway Energy's Cove Point LNG plant in Maryland returned to operations on October 28th after a month-long maintenance while the Freeport plant in Texas is set to at least partially resume production in early to mid-November. Meanwhile, the latest weather forecast from Maxar’s Weather Desk was showing colder trends day/day for the eastern half of the Lower 48 from November 10-14th.

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

[Tom Nolan + 2,443]

 

UK Warns About Cold Winter As Warm Spell Set To End

by Tyler Durden

Tuesday, Nov 01, 2022 - 01:45 AM

While many parts of Europe, from Germany and France to the UK, enjoy unseasonably warm weather, a new three-month forecast indicates the increasing possibility that 'Old Man Winter' is set to move in. 

Bloomberg reports UK's Met Office's three-month outlook shows a colder-than-normal winter is ahead. The forecast said there's a 25% chance the season will be cold, a 60% chance of it being around average, and 15% of it being mild. 

"The likelihood of a colder three-month period overall is slightly greater than normal," the forecasts said.

Warm weather has been an important factor in plunging natural gas prices across Europe. Dutch natural gas futures, Europe's benchmark, have fallen more than 70% since late August to 92.50 euros per megawatt-hour. 

We wrote a note a little more than a week ago titled "Germany May Stave Off Worst Of Energy Crisis As Mild Temps Forecast Through Mid-November."

However, abnormally warm weather is set to dissipate by mid-November across North West Europe and be more in line with 30-year averages. 

Colder weather is also ahead for Germany. 

And the UK. 

The good news is EU NatGas storage is 94% full despite reduced NatGas shipments from Russia. Shipments via Ukraine are one of the last remaining Russian supply lines to western Europe after the bombing of Nord Stream pipelines. The US is set to ramp up LNG shipments this winter. 

"The weather is quickly becoming a major factor as an unusually hot October kept gas demand in check across Europe and brought some relief for policymakers. The start of the heating season has been pushed back, allowing more gas to be injected into storage sites. The safety buffer could play a key role when the temperatures do drop, and consumption picks up again," Bloomberg said. 

Even with NatGas storage levels above a 10-year average for this time of year, colder weather in the second half of November could start drawing on inventories -- and at some point, NatGas prices will reverse. 

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Japan-Calls-On-Population-To-Conserve-Energy.html

Japan Calls On Population To Conserve Energy

By Irina Slav - Nov 01, 2022, 2:08 AM CDT

...To secure energy supply, the Japanese government last month even changed the national fuel law so that state-owned agencies could procure LNG in case private buyers are unable to secure sufficient volumes. The trade ministry will also have the power to order a reduction in gas use for large companies in a tight supply situation...

 

[Tom Nolan + 2,443]

Tuesday 11/1/2022 After U.S. close

US natural gas futures tumbled over 10% towards the $5.6/MMBtu mark, closing in on its lowest level since May, as forecasts for milder temperatures over the next two weeks should curb demand for cooling while allowing utilities to keep injecting gas into storage for the winter. Natural gas prices in the US have now declined more than 40% from their August peak, as record levels of production combined with lower export demand, particularly from Europe, spooked investors. Meanwhile, Berkshire Hathaway Energy's Cove Point LNG plant in Maryland returned to operations on Oct. 28 after a month-long maintenance. The Freeport plant in Texas is also set to resume production in early to mid-November partially.

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

[Tom Nolan + 2,443]

Wed Nov 2 - REUTERS

https://finance.yahoo.com/news/drillers-ask-u-exempt-smallest-110402357.html

Drillers ask U.S. to exempt smallest wells from looming methane rule

By Valerie Volcovici and Nichola Groom

WASHINGTON (Reuters) - Oil and gas companies have asked the Biden administration to exempt hundreds of thousands of the nation's smallest wells from upcoming rules requiring drillers to find and plug leaks of methane, according to industry groups, despite studies showing they emit huge amounts of the powerful greenhouse gas.

The Independent Petroleum Association of America and a coalition of some 20 state drillers' associations have asked the Environmental Protection Agency (EPA) to exclude wells producing less than 6 barrels per day from the rule, arguing that including them would be costly and inefficient, according to the IPAA and the Kansas Independent Oil & Gas Association.

An EPA official declined to confirm the request or discuss details of the upcoming proposal.

Oil and gas production is the source of around a third of the nation's methane emissions and is a key target for the Biden administration as it seeks to combat climate change. The United States is among over 100 countries that have pledged to cut their methane emissions 30% by 2030 from 2020 levels.

Biden's EPA last year unveiled a proposal that would require oil and gas companies to monitor 300,000 of their biggest well sites every three months to find and fix leaks, ban the venting of methane produced as a byproduct of crude oil into the atmosphere, and require upgrades to equipment such as storage tanks, compressors, and pneumatic pumps.

Those rules will most likely take effect in 2023 and are aimed at slashing methane from oil and gas operations by 74% from 2005 levels by 2035, an amount equivalent to the emissions created by all U.S. passenger cars and planes in 2019, according to an EPA summary.

But the rules left aside how the industry should manage methane emissions from its smaller "marginal" wells - those producing less than 15 barrels per day - an issue that will be dealt with in the EPA's supplemental ruling expected in the coming weeks. A source familiar with the administration's plans said the supplemental proposal could be announced at the United Nations climate conference in Egypt in November.

Groups representing the owners of low producing wells have told EPA officials they lack the resources to monitor all their sites with the latest technology. They also say smaller wells often produce only insignificant methane emissions that don't warrant the cost and effort of a monitoring program.

"Deal with the stuff where you know the emissions are coming from, don't just mandate something that goes across the board whether you have a one barrel a day well or a 15 barrel a day well," said Lee Fuller, environment and general strategy officer for the IPAA.

The problem, environmentalists say, is that collectively, the smaller wells produce a massive amount of climate-damaging methane.

Studies from the Department of Energy's National Energy Technology Laboratory, and from environmental group EDF, both issued this year, show that more than half of methane emitted from U.S. well sites comes from the more than 700,000 sites that produce less than 15 barrels a day.

Exempting wells that produce less than 6 barrels per day would effectively exclude more than 80% of those marginal wells from the EPA rule, according to KIOGA.

"The fact that those studies show that half of the problem comes from these wells shows that you can't leave half of the pie on the table," said Jon Goldstein, who leads EDF's efforts to regulate oil and gas operations.

Industry groups have also pressed the EPA to allow companies to use new or less expensive technology to scan for leaks to reduce costs, instead of optical gas imaging cameras that can cost tens of thousands of dollars and require intensive training.

The supplemental ruling could also address the industry's use of flaring, or the deliberate burning of excess natural gas from well sites, which can also lead to methane emissions.

[Tom Nolan + 2,443]

EXCERPT

Meanwhile, the possible rail strike and the reduction in Mississippi water levels could threaten coal deliveries to U.S. utilities, forcing power generators to burn more gas, Reuters reported.

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-erasing-weekly-gains-amid-bearish-weather-forecasts-1181374

[Tom Nolan + 2,443]

US NatGas After Close on Wed Nov 2nd

US natural gas futures rose over 8% Wednesday, pushing above $6.2/MMBtu, as forecasts for cooler midwest weather have investors anticipating increasing heating demand. Still, analysts expect nat gas inventories rose 102 bcf last week, which could put downward pressure on the price. Meanwhile, Berkshire Hathaway Energy's Cove Point LNG plant in Maryland returned to operations on October 28th after a month-long maintenance. Also, the Freeport LNG plant in Texas, damaged by a fire earlier this year, was set to at least partially resume production in mid-November but has yet to submit a restart plan to regulators. Still, natural gas prices in the US have declined more than 40% from their August peak of $9.7/MMBtu, as record levels of production combined with lower export demand, particularly from Europe, spooked traders.

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

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-early-pressure-fueled-by-mixed-weather-ahead-of-eia-report-1183987

Natural Gas Price Fundamental Daily Forecast – Early Pressure Fueled by Mixed Weather Ahead of EIA Report

By:James Hyerczyk

Published: Nov 3, 2022, 05:55 CDT

A 100 Bcf injection in the EIA report compares bearishly with a 66 Bcf increase in the same week last year and a 45 Bcf five-year-average build.

Natural gas futures are edging lower in a lackluster trade on Thursday as traders prepare for the release of key weekly government data at 14:30 GMT.

The market is down after failing to follow-through to the upside following yesterday’s double-digit gain. That move was fueled by a drop in output at the start of the month and expectations gas demand will rise once the Freeport liquefied natural gas (LNG) export plant in Texas the outage that had curtailed demand since June 8.

At 10:04 GMT, December natural gas futures are trading $6.024, down 0.244 or -3.89%. On Wednesday, the United States Natural Gas Fund ETF (UNG) settled at $19.90, up $1.06 or +5.63%.

Weather Conditions Having Tug of War Effect on Prices

Forecasts calling for lower demand over the next two weeks have been capping gains. With the weather expected to remain mild through at least mid-November, utilities should be able to keep adding gas into storage for a few weeks beyond the usual Oct 31 end of the injection season.

However, overnight models suggested that earlier forecast may be changing.

“Prices are back up again as of today (Wednesday) … as the overnight runs of the major weather forecast models locked on to the possible arrival of widespread below-average temperatures around mid-November,” analysts at energy consulting firm Gelber & Associates said.

Gelber also noted that price volatility has been “ramped up” this week “as there is a tug of war happening in bullish and bearish drivers in the market.” Rapid price changes in recent weeks have boosted the contract’s 30-day implied volatility index to its highest level since October 2021 for a second day in a row. The market uses implied volatility to estimate likely price changes in the future.

Short-Term Weather Forecast

According to NatGasWeather for Nov 3-9, “The eastern half of the US will be warmer than normal with highs of 60s to 80s as high pressure rules.

The West will be cool as weather systems sweep through with rain, snow, and highs of 30s and 50s. A weather system will eject out of the West and track across Texas Friday-Saturday with heavy showers but still comfortable with highs of 60s and 70s.

A warm pattern will continue to rule the eastern ½ of the U.S. on Sunday-Wednesday, while the West remains cool.

Overall, very light national demand is forecast over the next 7-days.”

Energy Information Administration Weekly Forecast

For today’s EIA storage report, NatGasWeather says “Survey averages suggest an injection of +95-102 Bcf, considerably larger than the 5-year average of +45 Bcf. It was warmer than normal over the eastern 2/3 of the U.S., while cool over the West. We expect a build of +100 Bcf, aided by the strongest wind energy generation in 4-months and could be the reason if it misses bearish.

Natural Gas Intelligence (NGI) says for today’s report, which covers the week-ended Oct 28, estimates submitted to Bloomberg showed injection expectations ranging from 87 Bcf to 109 Bcf, with a median prediction of 102 Bcf. Results of a Reuters poll landed at a median of 99 Bcf, with estimates spanning 81 Bcf to 109 Bcf. Estimates reported to the Wall Street Journal ranged from increases of 84 Bcf to 109 Bcf, with an average of 98 Bcf. NGI estimates a 110 Bcf increase.

Daily Forecast

The EIA forecasts compare bearishly with a 66 Bcf increase in the same week last year and a 45 Bcf five-year-average build.

We’re expecting more sideways trading with the market caught between a very weak short-term demand picture and a more supportive medium-term outlook. However, conditions could flip toward the bullish side quickly once the Freeport LNG plant comes back into service and the country gets hit with its blast of frigid air.

For a look at all of today’s economic events, check out our economic calendar.

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/IEA-Sounds-Alarm-Over-Europes-Gas-Supply-Next-Year.html

IEA Sounds Alarm Over Europe's Gas Supply Next Year

By Julianne Geiger - Nov 03, 2022, 11:00 AM CDT

• IEA issues warning for EU leadership over gas supplies.
• IEA prompts EU leaders to quickly ensure gas supply for the winter of 2023/2024.
• Europe has managed to fill its storage in preparation for this coming winter to 95%.

Join Our Community

The International Energy Agency, the world’s champion of the transition to renewable energy, has sounded the alarm bell over Europe’s gas supplies for 2023, and has issued a warning for EU leadership, the FT reported on Thursday.

IEA head Fatih Birol has issued a warning to the EU leadership to avoid letting their guard down with recently falling gas prices, prompting them to instead move quickly to ensure supplies for not this coming winter, but next.

Europe has managed to fill its storage in preparation for this coming winter to 95%, the IEA said, but the IEA’s forecast still shows that next year will be problematic, with a shortfall of 30 billion cubic meters seen by next summer.

“The fact that this winter may not be as challenging as we feared a couple of months ago does not justify complacency for next winter,” he said.

The difference between this winter and next winter, is, of course, the fact that this year, the EU had access to Russian gas for the better part of the year. Next year, most analysts are expected Russian gas exports to Europe at near zero, starting at the beginning of the year.

This will make it much more difficult for Europe to stockpile gas ahead of Winter 2023/2024.

Also next year, the IEA is warning that Europe could see more challenges with securing sufficient LNG next year—the EU’s replacement for Russian gas.

The IEA is asking EU leadership to hasten investments in energy conservation, renewables, and home insulation, as well as switching to heat pumps to cut back on demand for natural gas.

European natural gas prices have eased with the combination of the EU successfully securing enough gas to essentially fill their winter storage and mild weather delaying the start of winter.

Birol also warned that Europe may not make it through this winter entirely free from pain, with gas shortages still possible in certain locations.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Rise As Bullish Sentiment Builds
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[Tom Nolan + 2,443]

Nov 1 REUTERS  https://finance.yahoo.com/news/2-energy-transfer-hikes-full-210300792.html

UPDATE 2-Energy Transfer hikes full year profit forecast on natgas demand

Nov 1 (Reuters) - Pipeline operator Energy Transfer LP raised its profit forecast for the third time this year, helped by an acquisition, and by rising volumes of natural gas moving on its network.

U.S. natural gas production and demand is set to touch record highs in 2022 on soaring prices and exports as European governments seek to wean themselves off Russian gas following its invasion of Ukraine.

The transportation and storage company raised its forecast for adjusted earnings by $200 million to between $12.8 billion and $13 billion for the full year. The high end of its latest forecast is about $1 billion above the company's original estimate for the year....

Tellurian Reports 25% Increase in Natural Gas Production for Third Quarter 2022

https://finance.yahoo.com/news/tellurian-reports-25-increase-natural-112200846.html

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[Tom Nolan + 2,443]

European Natural Gas Prices Jump As Cold Weather Closes In

https://oilprice.com/Energy/Energy-General/European-Natural-Gas-Prices-Jump-As-Cold-Weather-Closes-In.html

By Tsvetana Paraskova - Nov 03, 2022, 7:48 AM CDT

• After several sessions of losses, Europe’s benchmark natural gas price jumped by 10% on Thursday morning.
• The uptick in natural gas prices came as weather forecasts pointed to a colder-than-normal spell this December in northwest Europe.
• A warmer-than-expected October helped European nations to fill their natural gas storage, but cold weather warnings have worried markets.

Join Our Community

Europe’s benchmark natural gas prices at the Dutch TTF hub jumped by 10% early Thursday as weather forecasts pointed to a colder-than-normal spell coming to northwest Europe by December.  

As of 11 a.m. in Amsterdam, the TTF futures were up by 7% at $130 (134 euros) per megawatt-hour (MWh), according to Bloomberg estimates. Prices are rebounding today from several sessions of losses earlier this week. 

The benchmark gas prices fell earlier this week and stayed below $97 (100 euros) per MWh as a warm October has allowed for more injections into storage instead of withdrawals. The comfortable storage levels, the high rate of LNG imports, and the mild weather in October and early November have eased concerns about gas supply and demand balances in the early part of the heating season. In fact, milder weather across most of Europe is postponing the start of the heating season.

In Germany, for example, the warm weather since the start of October has helped industry and households save 22% and 26%, respectively, of their gas consumption compared to the 2018-2021 average, says the Federal Network Agency, Bundesnetzagentur, the regulator which will enforce rationing if need be.   

As of November 1, gas storage sites in Europe were 95% full, with German storage at 99% full, according to data from Gas Infrastructure Europe. 

However, with the inevitable turn of the weather after a warm October, speculation returned over how fast storage levels could be depleted this winter and whether winter demand from Asia will intensify the competition with Europe for LNG supply.

Goldman Sachs, however, expects Europe’s benchmark prices to drop to $83 (85 euros) per MWh in the first quarter of 2023, according to a recent research note cited by CNBC. But after Q1, according to Goldman, gas prices are expected to jump in the second quarter and the summer when Europe will have started rebuilding stockpiles for what would be an even more difficult winter than this one.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• China Could Help Ease The Global Fuel Crisis
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[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/Low-Prices-And-Tanker-Traffic-Leave-2-Billion-Of-LNG-Floating-Off-Europe.html

Low Prices And Tanker Traffic Leave $2 Billion Of LNG Floating Off Europe

By Tsvetana Paraskova - Nov 04, 2022, 3:53 AM CDT

• $2 billion worth of LNG is currently floating off Europe’s coast due to a lack of LNG capacity and low prices.
• The tankers have an incentive to stay where they are as traders expect prices to rise in the coming weeks and months.
• Natural gas prices in Europe dropped as a warm October allowed country’s to fill their storage, but the forward curve is in a state of contango.

Join Our Community

More than 30 tankers carrying $2 billion worth of LNG are currently idling off Europe’s coasts as regasification terminals are full and traders expect European natural gas prices to start rising again as winter approaches, the Financial Times reported on Friday, quoting data from energy flow analytics company Vortexa.

According to Vortexa’s head of LNG, Felix Booth, the tankers idling off the coasts of northwest Europe and off Spain and Portugal currently have an incentive to stay where they are, waiting for higher gas prices in the coming weeks and months.

Last month, Spain declared an “exceptional operational situation” as several dozen LNG tankers queued for its regasification terminals, significantly exceeding available slots. The tanker pileup highlights Europe’s problem with LNG import capacity that prompted Germany to urgently strike a deal for the construction of two floating facilities so it can receive LNG directly.

In recent weeks, Europe’s benchmark natural gas prices at the Dutch TTF hub have slumped to the lowest in four months, as comfortable storage levels, the high rate of LNG imports, and the mild weather in October and early November have eased concerns about gas supply and demand balances in the early part of the heating season. As of November 2, gas storage sites in Europe were 95% full, with German storage at 99.3% full, according to data from Gas Infrastructure Europe. 

Although prompt-month futures prices have dropped, the forward curve is in a state of contango, with December prices and prices through March much higher, giving incentive to traders to hold onto the LNG tankers until prices rise again.  

Early on Thursday, gas prices jumped by 10% as weather forecasts pointed to a colder-than-normal spell coming to northwest Europe by December.  With the inevitable turn of the weather after a warm October, speculation returned over how fast storage levels could be depleted this winter and whether winter demand from Asia will intensify the competition with Europe for LNG supply.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Rise As Bullish Sentiment Builds
• Oil Shortage Forecasts Clash With Grim Economic Projections
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https://oilprice.com/Energy/Energy-General/European-Natural-Gas-Prices-Jump-As-Cold-Weather-Closes-In.html

European Natural Gas Prices Jump As Cold Weather Closes In

By Tsvetana Paraskova - Nov 03, 2022, 7:48 AM CDT

• After several sessions of losses, Europe’s benchmark natural gas price jumped by 10% on Thursday morning.
• The uptick in natural gas prices came as weather forecasts pointed to a colder-than-normal spell this December in northwest Europe.
• A warmer-than-expected October helped European nations to fill their natural gas storage, but cold weather warnings have worried markets.

Join Our Community

Europe’s benchmark natural gas prices at the Dutch TTF hub jumped by 10% early Thursday as weather forecasts pointed to a colder-than-normal spell coming to northwest Europe by December.  

As of 11 a.m. in Amsterdam, the TTF futures were up by 7% at $130 (134 euros) per megawatt-hour (MWh), according to Bloomberg estimates. Prices are rebounding today from several sessions of losses earlier this week. 

The benchmark gas prices fell earlier this week and stayed below $97 (100 euros) per MWh as a warm October has allowed for more injections into storage instead of withdrawals. The comfortable storage levels, the high rate of LNG imports, and the mild weather in October and early November have eased concerns about gas supply and demand balances in the early part of the heating season. In fact, milder weather across most of Europe is postponing the start of the heating season.

In Germany, for example, the warm weather since the start of October has helped industry and households save 22% and 26%, respectively, of their gas consumption compared to the 2018-2021 average, says the Federal Network Agency, Bundesnetzagentur, the regulator which will enforce rationing if need be.   

As of November 1, gas storage sites in Europe were 95% full, with German storage at 99% full, according to data from Gas Infrastructure Europe. 

However, with the inevitable turn of the weather after a warm October, speculation returned over how fast storage levels could be depleted this winter and whether winter demand from Asia will intensify the competition with Europe for LNG supply.

Goldman Sachs, however, expects Europe’s benchmark prices to drop to $83 (85 euros) per MWh in the first quarter of 2023, according to a recent research note cited by CNBC. But after Q1, according to Goldman, gas prices are expected to jump in the second quarter and the summer when Europe will have started rebuilding stockpiles for what would be an even more difficult winter than this one.   

By Tsvetana Paraskova for Oilprice.com

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