THE ESCALATOR: Global Natural Gas Markets Seen Fascinating This Week as Hurricane Rips Into United States (3)

–Q4 2021 vs Q1 2022 in the frame
–Expensive natgas forces poor countries back to coal

By Mathew Carr

Aug. 30-Sept. 2, 2021 — As we predicted, this week is fascinating for natural gas markets.

Check out this LinkedIn Post, and the comments that follow:

In 2021, gas prices in Europe have increased so dramatically that this year’s market dynamics resembles an escalator continuously going up. When comparing the current situation with that of 2020, one may even draw an analogy with an elevator that moves upwards at a fast pace, without staying at any floor for long. But in that context, there is at least one contract that looks undervalued among others, however surreal it might sound.

This refers to the Q1 ’22 product, which have been offered at a discount to Q4 ’21 over the past two months. Negative time spreads between a contract for Jan-Mar delivery and a product that covers the period from Oct to Dec are pretty uncommon for the European gas market, where prices usually peak early in the year as heating demand is at its highest. Yet, the year 2021 is a special one.
https://www.linkedin.com/posts/yakov-grabar-87a70547_energy-trading-volatility-activity-6837658803174014976-6ugA

IN THE U.S., gas prices have already jumped as Hurricane Ida crashes into the USA, cutting output, but not LNG exports so far.

TTF prices opened strongly Monday:

Even higher this week — by Thursday:

ICE

Check out this week’s “crisis prices” in the dead of summer versus these at the end of 2019 in the dead of winter — hint: prices were about two thirds lower then:

Link: https://www.bloomberg.com/news/articles/2019-12-30/gazprom-ukraine-finalize-deals-to-ship-russian-gas-to-europe?sref=fcMjhrdB

One difference between now and 2019 is that the climate fight has progressed:
https://carrzee.org/2021/08/27/u-s-european-esg-related-contracts-jump-as-commodity-funds-seen-showing-interest/

(Adds Thursday chart; Monday opening of TTF, tweets. More to come)

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