On Monday, natural gas prices fell despite steady oil prices largely driven by Israeli tensions. The most significant price drops occurred at the front-end of the market. Additionally, front-month and front-season contracts fell by over 3.2p/therm (0.11p/kWh) compared to their previous close, according to ICE data.
What does this mean?
A surge in incoming LNG shipments largely drives this downward trend in gas prices. Shipping data indicates that UK terminals will receive up to 10 LNG vessels within two weeks. Among these, the Maran Gas Vergina will deliver Trinidadian LNG to the South Hook terminal.
National Gas reported that LNG sendout averaged 104 million cubic meters per day (mcm/d) during the previous session. This marked a 70% day-on-day increase. This volume, therefore, accounted for nearly 40% of the forecasted gas demand in Britain.
The crisis in Syria and the fall of the Assad regime have created a power vacuum. This has led to Israeli missile strikes and the seizure of the UN buffer zone for defense. Consequently, these events caused Brent and WTI crude oil prices to rise by over $1.00 per barrel on Monday.
Summary
As of Tuesday morning, gas prices stabilized near previous settlement levels as increased LNG shipments eased Monday’s sharp decline. Meanwhile, Middle East instability, including Israeli strikes amid the Syrian crisis, continues to influence global energy markets and oil price volatility.
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