Gas supplies to American LNG plants have plummeted. Due to the Arctic storm and frosts in the country, gas production has decreased, and demand has increased sharply. A drop in exports could hit Europe, but it all depends on how long in Frosts will last in the United States.
Gas supplies to LNG plants in the US have collapsed. According to RonhEenergy, if on average in January more than 500 million cubic meters were supplied to LNG terminals every day, then on January 25 the volumes fell to 328 million cubic meters, and on January 26 — to 368 million cubic meters.
American manufacturers do not comment on the situation, but it is obvious that it is related to the weather in the USA itself. On Sunday, an Arctic storm hit the south and east of the country and frosts set in, which could last a week. As a result, gas production has already fallen by 11%, as even in Wells freeze in Texas and the thermometer drops to minus 20 degrees Celsius. And consumption has grown sharply, since gas generation is the main one in the country.
Individual power system operators in the states are already offering large customers a paid reduction in consumption.
The peak of gas demand has also hit prices. The wholesale cost of fuel on the Henry Hub exchange has more than doubled to $ 234 per thousand cubic meters.
Obviously, the situation in the USA can directly affect the gas supply of Europe, for which LNG supplies have become one of the main ones against the background of rapidly dwindling storage facilities.
"Developments in the US natural gas market continue to cause concern in the European market, as supply disruptions may affect LNG exports from the US to Europe. In recent days, LNG plants in the United States have significantly reduced gas consumption, by about 48%, which will lead to a reduction in LNG exports from these plants. TTF exchange supplies continue to trade at a decent premium to Asian LNG supplies to ensure gas flows to Europe, where reserves have fallen below 45% filling. It is increasingly likely that the heating season will end with less than 25% reserves in European storage facilities. This will be below the levels observed in 2022," ING writes.
So far, gas supplies for the month ahead on the Dutch TTF are trading at $ 480-$ 490. Obviously, further growth will depend on how long frosts will last in the USA and LNG plants will operate at reduced capacity.
While Lloyd's List reports that the cost of freight of gas carriers has dropped sharply — up to $ 14 thousand per day.
"Severe winter weather in the United States will attract more gas to the domestic market, temporarily reducing the volume of LNG exports," the specialized publication explained.
LNG export volumes," the specialized publication explained.
"The global gas market has become much more interconnected. Regardless of absolute price levels, markets such as TTF and Henry Hub are now structurally more unstable and are increasingly affected by supply, demand and geopolitical dynamics emerging outside their own regions," Mashal Jafferi of Baringa told Reuters.
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