Norway Outages Fuel Surge in European Gas Prices – ING

Gas: Norway Outages Cause a Surge in European Gas Prices – ING

European natural gas prices saw a notable increase, with the Title Transfer Facility (TTF) closing nearly 5% higher, according to ING’s commodity strategists, Warren Patterson and Ewa Manthey. This rise in prices is primarily attributed to supply disruptions in Norway, a key supplier to the EU.

Norwegian Outages and Impact on the Market

An unscheduled outage at the Kollsnes processing plant in Norway has been a key factor driving the increase in gas prices. Although the exact timeline for the outage remains uncertain, its impact is clear. Additionally, seasonal maintenance is scheduled to take place this week at several Norwegian fields and facilities, which may further tighten supply and exert additional upward pressure on gas prices.

Asian LNG Prices at a Premium Over European Prices

ING analysts also note that Asian LNG prices have generally been quoted at a premium to European gas prices in recent months. This price differential has contributed to lower LNG send-outs in Europe, as the market has seen a reduction in the availability of liquefied natural gas (LNG) supplies. According to Gas Infrastructure Europe, LNG send-outs hit a six-month low in February, exacerbating the supply shortage in Europe.

The ongoing issues in Norway, coupled with the continued price premium from Asia, are expected to keep European natural gas prices elevated in the short term. As a result, energy markets are likely to remain volatile as these supply disruptions continue to impact the global gas trade.