Natural Gas News – November 3, 2020
Natural Gas News – November 3, 2020
The Global Hub for Trading Natural Gas Moves to the Netherlands
The Dutch natural gas market is reinforcing its position as one of the most important trading hubs in the world. Trade on the Dutch Title Transfer Facility, as the market is known, is surging as Europe increased imports from Russia, Norway and further afield via liquefied natural gas tankers. Natural gas futures open interest, a tally of outstanding contracts on the Intercontinental Exchange Inc., are at an alltime high in data going back to 2005. Dutch gas futures trading volume on ICE has soared 24% this year after more than doubling in the previous two years. The pace of growth is impressive compared with the much larger U.S. Henry Hub benchmark, where futures turnover on CME Group Inc. has declined from its 2018 peak. The Dutch hub’s growing status is part of the LNG revolution.
Natural Gas Market Implied Deficit Set To Increase With LNG Exports On The Rise
The natural gas market has remained resilient despite warmer than normal weather projected for the 6-10 day range. The key culprit for the price resilience is the bullish fundamental balance
we are still seeing. For example, our natural gas implied balance until the end of November is -4.49 Bcf/d. Keep in mind that the 2018 comparison had very bullish weather heading into November and despite a more or less neutral weather outlook, the substantial deficit is going to be something everyone will keep an eye on. There are really two driving forces for the large implied deficit for the market. There are reasons to be even more bullish on the current LNG exports as China’s winter gas demand will rise ~10% on economic recovery.
This article is part of Daily Natural Gas Newsletter
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