European natural gas prices declined to the lowest level in a week as supply risks abated with the partial restart of the Freeport LNG plant in Texas.
Benchmark futures fell as much as 3.2% on Monday after loadingsresumed at the facility over the weekend. Freeport LNG, which is one of the largest US suppliers, had suspended exports as Hurricane Beryl made landfall in early July and disrupted power supplies across the state.
Still, the plant is ramping up production slowly and multiple scheduled shipments have been canceled. European gas prices have been volatile in reaction to the Freeport outage, highlighting Europe’s increased dependence on liquefied natural gas imports.
“The outage clearly shows how prone the TTF market remains to upside risks, based on the ‘fear’ of not having enough supply,” said Florence Schmit, an energy strategist at Rabobank. “This fear is still ingrained in the market even though at present there is enough supply to go by.”
For now, storage sites across the continent are filling up, with inventories almost 83% full.
Dutch front-month futures, Europe’s gas benchmark, slid 2.9% to €31.23 a megawatt-hour at 9:15 a.m. in Amsterdam.
(Bloomberg, July 22, 2024)
