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European LNG prices plumb 8-month lows tracking EU gas

European LNG prices have sunk to an eight-month low, tracking losses on the benchmark Dutch TTF gas hub amid mild weather and overall bearish fundamentals.

The landing price for LNG delivered ex-ship (or DES) to northwest Europe in March was assessed late on Monday at USD 7.59/MMbtu (EUR 24.04/MWh), USD 0.40 lower on the day and the lowest since 6 June, according to data from Spark Commodities. Prices were shadowing European gas hub prices, with the TTF front month sliding to a seven-month low of EUR 25.63/MWh yeste.rday, before settling at EUR 25.73/MWh.

European gas prices fell amid high inventories, subdued demand and strong renewables generation, said Australia’s ANZ bank.

“That’s been coupled with relatively mild weather over the northern hemisphere winter,” it said, with the easing supply risks seeing forwards decrease more than 20% since the start of the year.

Further losses were expected after forecasts indicated “temperatures are likely be above seasonal norms across Europe throughout February”.

European underground gas storage facilities, meanwhile, were last seen 67% full, slightly higher year on year. However, LNG supplies in the month to date had tumbled 15% to 4.7bcm month on month due to delays to Qatari supplies and low demand, Montel reported on Monday.

Low Asian prices
Europe’s main competitor for the chilled fuel, Asia, also saw prices around multi-month lows of USD 9.44/MMbtu, though it still remained more competitive to ship cargoes to the latter region. Nevertheless, Asian LNG demand, like Europe’s, remained tepid amid mild weather and high stocks, participants have said.

There is also diminished activity in the region as the one-week Lunar New Year holiday started on Saturday.

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