Shutdown Of Freeport LNG Export Terminal Tumbles the Natural Gas Prices
- 20-Jun-2022 4:27 PM
- Journalist: Patrick Knight
Houston, USA- Fire at the Freeport LNG terminal led to the facility's shutdown, which tumbled the prices of Natural Gas in the global market. In the previous week, Natural gas spot prices fell at significant locations in the US. Henry Hub's prices fell from USD 9.46 per MMBtu to USD 7.72 per MMBtu due to oversupplies and slow exports of products for the global market.
The price of Natural Gas declined on the Gulf coast despite its increasing demand for air conditioning across the South and Southeast. In terms of supply, US Natural Gas supply surged week over week with higher net imports from Canada and Mexico to meet Midwest demand.
NYMEX Natural Gas futures fell significantly on 17th June and closed at USD 6.94 per MMBtu. At the Title Transfer Facility (TTF) in the Netherlands, the LNG spot prices rose in Europe by USD 3.21 per MMBtu, with a weekly average of USD 27.70 per MMBtu, ending on 17th June.
In Europe, the prices of Natural gas increased with Gazprom further tightening Gas supplies to European Union (EU), putting pressure on the major downstream derivative producers to meet the demand from the consumer’s end.
“If the supply of Natural Gas from Moscow will halt continuously, European inventories could go below the threshold required to survive the upcoming winters,” affirmed by the trusted source in Rotterdam.
According to ChemAnalyst, Natural Gas prices will fluctuate continuously, depending on the supply/demand fundamentals, weather conditions, and viability of alternative sources. Natural Gas futures could experience volatility in the forthcoming period. The downstream derivative market will also suffer from this, and the prices of Methanol and Acetic Acid derivatives are expected to increase. Meanwhile, the turnaround in the LNG terminal till September will also impact the price trend in the global market. Commodity exchanges will also revise the Natural gas futures for the upcoming months, which will depend upon the market scenario and consumer demand.
