Don't be afraid of slump,the rising trend of natural gas prices may not be over

机构有话说
2022-08-25

Since 2022, Affected by geopolitics, extreme weather and various force majeure factors, The price trend of international natural gas market completely deviates from the normal trend law, and frequently fluctuates greatly this year. Because of the different factors affecting price fluctuation in Europe, America, Asia and other regions, the correlation of market prices in different regions is weakened, and the market price trends are different.

Compared with 2021, the spot price of TTF in Europe and the spot price of Port Henry (HH) in the United States are running at a high level in 2022, and the price trend is completely different from the law of natural gas market.

Natural gas prices in the United States and Europe run abnormally

and show an upward trend

Affected by the conflict between Russia and Ukraine in March, the spot price of TTF in Europe soared all the way, exceeding the highest price in the past years. Later, due to the mild climate in spring and the small actual demand for natural gas, the market price still showed a downward trend despite the decrease in Russian supply.

In 2022, the overall trend of spot price of natural gas (HH) in Port Henry of the United States showed a fluctuating upward trend, As a major consumer and exporter of natural gas, Market price has a great influence on the international market. Due to the continuous high temperature in the United States since spring, the demand in the United States has been rising continuously, and the demand in the United States has reached its peak in summer.

In addition, Europe is restricted by the reduction of pipeline gas supply in Russia, and the market supply is inclined to liquid supply. The export of the United States has been increasing continuously, and the utilization rate of the seven export terminals in the United States has risen sharply. At the beginning of June, an accident occurred in Freeport, the third largest export terminal in the United States. The liquid export in the United States was forced to decrease, and the supply in the region increased, which led to a drop in the price of HH in the United States. Later, due to the escalating sanctions against Russia and the rising temperature in the United States, HH prices and TTF prices showed an upward trend.

Natural gas prices in various countries are decoupled

and the right to speak of natural gas

Since the autumn of 2021, Europe's own natural gas supply is declining, the overall inventory is low, the demand for local power supply is rising when nuclear power plants are shut down, and Russia reduces its gas transmission capacity, which leads to the prominent contradiction between supply and demand.

TTF prices have been rising all the way. Until the end of 2021, LNG ships from the United States and other places have increased their transportation to Europe, which has increased the supply of LNG in Europe. Major LNG producing countries such as the United States have increased their exports to European LNG ships, and at least 15 ships have been added to the original supply in Europe to go to Europe, which has eased the tight supply of natural gas in Europe and promoted the return of TTF prices.

Until the Russian-Ukrainian conflict officially broke out at the end of February 2022, the international market price remained stable in 2022. Since the Russian-Ukrainian conflict, the international natural gas supply and demand pattern has gradually changed.

About 40% of European natural gas is supplied by Russia, The dependence of natural gas market on foreign countries is about 85%, When the supply is stable, the market price is determined by the demand. However, due to the conflict between Russia and Ukraine, Russia has continuously introduced counter-measures, and the westbound supply of Russian pipeline gas has been continuously reduced. There is a gap in the supply of natural gas in Europe, and the market has fluctuated greatly for many times. As of August 16, the TTF price in Europe has approached 25,000 yuan/ton, close to the highest value in history.

Since the conflict between Russia and Ukraine, the market export of the United States has greatly increased, the utilization rate of export terminals is approaching full capacity, the international market share of liquefied natural gas (LNG) in the United States has been expanding, the cooperation between China and the United States in natural gas has been increasing in recent years, most of the long-term LNG purchase agreements between China and the United States have been signed at HH price, and the price influence of Port Henry (HH) in the United States has been deepening

The overall fluctuation range of China's domestic ex-factory price is lower than that of TTF and HH. China's natural gas supply sources are abundant, and the overall market supply and demand are relatively stable. However, due to the impact of Russia-Ukraine conflict, the market price is still running at a high level.

Entering the heating season reserve stage,

it is expected that LNG prices will rise as a whole

After August, All parts of the northern hemisphere have entered the storage stage of heating season, Extreme weather has occurred frequently in various places this year, As a major LNG exporter, The market price of natural gas is greatly affected by domestic and other consumer prices, At present, because the Freeport is always under maintenance, It is expected that the free port terminal will resume work in October, and the export of the United States will increase, while the supply will decrease in disguise, which will drive up the market price in the United States.

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