Natural Gas: European healthy inventories offset supply fears – ANZ
European gas futures declined for a third consecutive day as healthy inventories offset supply fears, ANZ analysts Brian Martin and Daniel Hynes note.
Geopolitical risks continue to hang over the market
“Europe is heading towards the heating season with ample inventories. Storage facilities are currently 88.24% full, well above normal seasonal levels. At the same time, industrial demand remains lacklustre and temperatures in northwest Europe have not been as hot as in the south, curbing cooling demand.”
“However, geopolitical risks continue to hang over the market. Ukraine said it has made inroads into Russian territory. With a key gas transit point nearby, risks of disruption to gas that still supplies a sizeable part of Europe’s needs remains high. North Asian LNG prices rose to a two-month high as summer heat maintains high demand.”
“Power demand from air conditioning in South Korea and neighbouring importers has been strong, resulting in increased activity from buyers from the region. Brazil has emerged as an aggressive buyer of LNG. Dry weather is impacting its hydropower generation, forcing the country to utilise more gas-fired power.”
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FXStreet Insights Team
FXStreet
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