Gas Prices Ease Amid Eased Tensions, Volatility Remains Moderate

The Gas Exporting Countries Forum (GECF) has reported that natural gas and LNG prices in Europe and Asia declined slightly in June, but market volatility remained moderate. The GECF attributed the decline to the signing of a memorandum on ending the conflict in the Middle East on June 18 and expectations that the Strait of Hormuz would reopen.

According to the report, warmer-than-usual weather in key consumer regions increased demand for gas used in cooling, limiting a sharper decline in prices. However, forecasts for above-average temperatures during the summer months are expected to continue supporting spot prices.

In Europe, the average spot gas price at the TTF hub declined 7% in June to $15.12 per million British thermal units (MMBtu), while prices at the UK NBP hub fell 8% to $14.59/MMBtu. In Asia, spot LNG prices for Northeast Asia (NEA) averaged $17.23/MMBtu in June, a 4% decline from May.

The report also noted that prices under oil-indexed LNG contracts increased in June, with the average price under Oil-Indexed I rising 8%, Oil-Indexed II increasing 12%, and Oil-Indexed III for Europe gaining 9%.