TMN - Natural gas

Natural gas futures rise on lower Nord Stream flows

On Wednesday, natural gas prices increased, boosted by the reports of lower flows from the Nord Stream pipeline.

Subsequently, the US NGAS futures climbed 1.65% or 0.13 points to $7.825 per metric million British thermal units. This movement dismissed its decreases during the prior trading session.

Likewise, Dutch front-month contract, the European benchmark, hiked 2.18% to €205.18 per megawatt-hour.

Australia’s ANZ Bank stated that the supply from the key Nord Stream pipeline fluctuated. In line with this, the connection fell below its 20.00% of capacity for short periods.

The channel previously slashed natural gas flows from 40.00% in July, with Moscow citing technical issues as the reason. Correspondingly, analysts now see the weighing impact of the shortages in the European industry.

Moreover, Germany’s Covestro AG, a provider of high-tech polymers, warned of further risks to its facilities in case of gas rationing. At the same time, the extreme heat exacerbated the constraints, pushing electricity demand higher.

Accordingly, Asian spot liquefied natural gas prices also extended gains on increased competition for LNG cargoes. Then, Singapore’s trade and industry minister said global energy markets would remain volatile amid supply constraints and strong demand.

Europe now races to stockpile the vital fuel before the winter, lining up alternative supplies. The bloc also exerted efforts to look for infrastructures to import more liquefied natural gas. Eventually, storage sites are now about 70.00% full, which is in line with the five-year average.

Analysts see falling natural gas demand

Meanwhile, analysts also focused on possible weakening natural gas consumption in the EU region, given the surging costs. For instance, Germany has already allowed the revival of mothballed coal-fired power plants. Then, in July, industrial gas use declined by 19.00% year-over-year in the region.

Experts cited the need for further demand destruction and high LNG imports to offset the recent decline in Russian imports.

In the US, natural gas futures slipped on Tuesday amid the record output and forecasts for less demand.

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