There is an Interesting trend in Europe, as reported in a variety of news outlets. Natural Gas immediate future prices have jumped by more than 30% in a week. This is a huge market reversal. The reasons are varied, which suggest underlying market support. They include increase in oil prices, which in Europe often set natural gas pricing indexing. The second is cool weather which has increased underlying demand. We also have lower North Sea output, a long term trend. I believe the real issue for the rapid shift is market traders who believe the current period of low prices can’t continue and have placed their bets.
It remains to be seen if LNG imports, including from the US but also from Qatar which wants to hold its share in Europe, will have an impact. We also have the Australian LNG coming on line which was largely target at China and Japan. China is slowing economic growth forecasts and Japan has restarted a number of nuclear power plants leading to lower than forecasted demand.