The gas price barely budged this week. The balance on the gas market is not the result of calm, but of fairly strong price-increasing and price-lowering factors that keep each other in balance. For example, investors are weighing the consequences of the war in Israel against the end of strikes in the Australian LNG sector.
The gas price remained quite balanced this week with constant quotes of just above €50. On Thursday, October 19, the gas price was at the lowest price of the week, at €50,17. The highest quotation was just over €1 higher, reaching €23 on Monday, October 51,28.
The upward momentum appears to be mainly the result of the war in Israel. Israel's Tamar gas field remains closed and fears are growing about the global consequences. For example, analysts are afraid that Egypt's LNG production will stall. In addition, the war appears to pose a risk to Qatari LNG ships sailing through the Strait of Hormuz. The latter in particular could be disastrous for the European gas market, as Europe imports more and more liquefied gas from the country. On Tuesday, October 19, additional problems surrounding the Norwegian gas sector arose. Disruptions have occurred around the Dvalin and Visund fields, causing sales from the country to drop by 10 million cubic meters.
Price pressure
On the other hand, there are also factors that put pressure on the market. Last week it was announced that Chevron had reached a new deal with the unions. As a result of the deal, unions immediately ordered an end to strikes in Australia's LNG sector. This seems to have come to an end for the second time to the saga that has been festering since August. Since then, strikes have been a constant threat to the company and twice the employees decided to stop work.
Previously, the deal between both parties seemed to have been completed, but at the last minute the Australian unions decided to withdraw. The unions accused Chevron of wanting to cancel agreements at the last minute. The (threat of) strikes put heavy pressure on about 7% of the globally traded LNG. The tension caused international gas prices to rise by 35% in August. At the moment the pressure seems to be off somewhat, but it has not yet been said that the strikes have finally come to an end. The Australian unions have already indicated that they will resume the strike if Chevron tries again to unilaterally change the deal.
In addition, the mild weather ensures lower gas prices. According to current weather forecasts, it will remain above average warm until early November. As a result, European gas demand is much lower than you would expect at this time of year.