European and U.S. benchmark natural gas prices rose early on Monday amid concerns about supply due to still unresolved labor issues at Australian LNG export facilities and planned maintenance reducing Norwegian pipeline gas deliveries to Europe.
Prices at the Henry Hub in the United States were up 2.6% early on Monday.
In Europe, the front-month futures at the Dutch TTF hub, the benchmark for Europe’s gas trading, had increased by 1.9% to $35.08 (32.65 euros) per megawatt (MWh) as of 10.35 a.m. GMT on Monday. Earlier in the trade, European gas prices rose by 4% at opening, after Norwegian operators on Saturday halted supply from the giant Troll gas field due to regular maintenance, and said maintenance was also being held at fields delivering gas into the Segal network for the UK.
The lowered supply from Norway, which has replaced Russia as the single-biggest gas supplier to Europe, has pushed European prices higher, together with still unresolved issues between unions and Chevron at the U.S. supermajor’s Australian LNG facilities, Gorgon and Wheatstone.
At the end of last week, the workers’ union in Australia reached an in-principle agreement with Woodside Energy over pay and work conditions that averted a strike at Woodside’s North West Shelf facilities. This sent European gas prices tumbling on Thursday.
But the threat of strikes at Chevron’s facilities hasn’t been eliminated yet. On Monday, workers voted to allow their unions to call strikes if necessary. The unions must give Chevron a notice of seven working days ahead of an industrial action.
Chevron representatives have told Reuters that the company continued with negotiations “as we seek outcomes that are in the interests of both employees and the company.”
Meanwhile, European LNG imports slumped last week by 18% with more cargoes headed to Asia, according to Kpler vessel-tracking data reported by Montel.
Gas demand in Europe is still depressed, and gas storage facilities are already more than 90% full, well ahead of the EU deadline for reaching that target by November 1.
By Tsvetana Paraskova for Oilprice.com
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