Global gas prices hit fresh peaks on surging power demand, low stocks

London, (Quantum Commodity Intelligence) – US natural gas futures traded at the highest levels since November 2018 on Monday, reacting to the heatwave in the US coast, but prices also reflecting the global picture where soaring power demand and low inventories have lifted LNG prices.  

NYMEX natural gas for July-delivery soared above $3.620/mmBtu, while global LNG prices are also trading at unseasonally high levels.  

Commenting on global gas prices, Commerzbank bank said; "The price upswing is the result of low stocks following a cold winter, the most recent heatwave in Europe that has driven up electricity consumption for air conditioning, the high demand for liquefied natural gas (LNG) in Asia – LNG prices have likewise more than doubled in the past four months."

Commerzbank noted day-ahead European gas prices hit 13-year highs late last week, while carbon prices have also pushed higher.

"Fuelled by the massive rise in the EU gas price, which is now trading at €32 per MWh (TTF, month ahead), its highest level since October 2008, while the carbon price has also risen above €55 per ton again," said the German bank.

European gas inventories are the lowest in more than a decade for this time of year.

Meanwhile, spot LNG for North Asia deliver has surged above £13/mmBtu, while JKM futures for August and September were around $12.50/mmBtu Monday.  

"Strong demand from other gas-hungry regions, such as Europe, has been forcing Asian end-users to increase bids on tenders," said Daniel Hynes, senior commodity strategist at ANZ.