More LNG gas from the USA, but risks for the European gas market remain – Commerzbank
|European gas price has risen in recent days, but the situation in the market is likely to remain relaxed in the short term, Commerzbank’s commodity analyst Carsten Fritsch notes.
Demand for natural gas in Europe remains weak
“Although the European gas price has risen in recent days due to rising temperatures and the associated higher demand for air conditioning, the situation is likely to remain relaxed in the short term. This is because gas storage facilities are already 84 percent full, which is a good 7.5 percentage points more than usual at this time of year.”
“At the same time, according to Reuters, the second-largest US liquefaction terminal Freeport, which had to be closed on 7 July due to Hurricane Beryl, has been operating at full capacity again since Sunday. In addition, according to the IEA's quarterly report on the gas market, the US, Europe's largest LNG supplier, will bring further export capacities into operation in the second half of the year.”
“Demand in Europe remains weak. However, even if storage levels are likely to be well filled by the start of the withdrawal phase against this backdrop, the risks should not be ignored: On the one hand, according to the think tank Bruegel, the EU still sourced around 11 percent of its gas imports from Russia in the first half of the year. On the other hand, China's demand for LNG has recently increased significantly.”
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