Gas Prices Drop as Hurricane Beryl Impact on U.S. LNG Facilities Eases
(Reuters) — Dutch and British wholesale gas prices were down on Tuesday morning amid easing concerns over the impact of Hurricane Beryl on U.S. liquefied natural gas (LNG) facilities after Freeport LNG said it will resume production after it has passed.
The benchmark front-month contract at the Dutch TTF hub was down 0.55 euros at 31.65 euros per megawatt hour (MWh), or $10.03/MMBtu, by 0831 GMT, LSEG data showed.
In the British market, the day-ahead contract was 1.0 pence lower at 73.5 pence per therm.
Beryl, the earliest category five hurricane on record, was expected to weaken to a tropical storm and to a tropical depression on Tuesday, the U.S. National Hurricane Center (NHC) said in latest briefing.
The amount of natural gas flowing to Freeport LNG's export plant in Texas has fallen close to zero in the last couple of days but the company said production will resume once it is safe to do so after hurricane passes.
"The market expects production to resume quickly, which explains the additional drop in TTF month-ahead prices, which confirmed their bearish bias," analysts at Engie's EnergyScan said in a morning note, adding that an additional price drop would indicate that the market is initiating a downtrend.
Gas flows to Corpus Christi and Sabine Pass LNG projects haven’t declined, indicating production hasn’t been affected by the storm, Daniel Hynes, senior commodity strategist at ANZ bank said.
"Nevertheless, strong demand in Asia is likely to keep upward pressure on prices. Hotter-than-normal summer temperatures are stretching Tokyo’s power grid," he added.
In Britain, wind and solar generation is picking up, with wind speeds forecast to remain strong until at least July 14.
In the European carbon market, the benchmark contract fell by 0.29 euros to 68.7 euros a metric ton.
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