Global Natural Gas Prices Decline Amid Faltering Product Consumption
- 09-May-2023 12:18 PM
- Journalist: Gabreilla Figueroa
Louisiana, USA - The Global Natural Gas price declined to its record low level with limited trading activities. The Liquefied Natural Gas (LNG) market remains lackluster, and market participants remain reluctant to increase the prices for the overseas market. It was observed that ample inventory stocks also slumped the spot purchasing activities.
Since the start of the energy crisis, European Natural Gas prices have gradually declined with the hope of strong economic recovery. A decrease in European Title Transfer Facility (TTF) levels was seen on May 5th, a level last found in July 2021 when Russia was first suppressing Europe's energy supplies ahead of the attack on Ukraine. Also, LNG seaborne cargoes stocked to replace Russian cargoes are slowing down in Europe.
The European Union is looking forward to applying a scheme to help fill Natural Gas storage ahead of winter and to avoid record-high energy prices. It was announced on May 2nd that 65 European companies had registered their demand to jointly buy Natural Gas to improve market access to small businesses and reduce energy prices for Europe's energy-intensive industries, such as fertilizer and steel.
Producing units in the US continue to extract record levels of Natural Gas from the ground, with limited storage availability and high-level inventories among the ventures. According to Environmental Impact Assessment (EIA) report, working gas in storage was 2,063 Bcf, with an increase of 54 Bcf from the previous week. In terms of cost support, the weak price trend is also driven by concern about an economic slowdown, and US investors are also looking forward to hiking another US interest rate.
According to ChemAnalyst, Natural Gas prices will remain on the lower end with adequate inventories and bearish spot trading fundamentals. In Europe, the EU scheme is anticipated to support the Natural Gas inventories for the upcoming winter season. In the US, an expectation of normal to near warmer weather this month will decrease the consumption level from the domestic and overseas markets. There will be a reduction in Natural gas flow in the US due to the closure of LNG export plants for spring maintenance.