"Asia remains the preferred destination of US free-on-board (FOB) LNG cargoes as the arbitrage has been mainly open for May. Therefore, we may see additional US-origin LNG being offered in Asia for June and July delivery, though the majority of US-origin LNG has been discharged into Europe since last year. In the US, total gas consumption is anticipated to see an uptick in the coming weeks fueled by warmer weather prompting heightened power generation for air conditioning needs. However, some reductions in gas-for-power demand are expected in Texas after a tornado in Houston on 16 May caused over 900,000 customers to lose power at the peak of the outage. The severe damage to transmission and distribution electric systems has hindered gas demand for power generation. Restoration efforts are ongoing, but full recovery may take longer for the hardest-hit area. The impact comes just as temperatures in the state are heating up, with weather forecasts predicting higher temperatures throughout 26 May."

Asia spot liquefied natural gas (LNG) prices for July traded 9.5% higher week-on-week at approximately $11.5 per million British thermal units (MMBtu) on 20 May.
August 2024 financial derivatives of Asian LNG also traded around $11.9 per MMBtu on 21 May, up 10.7% on the week.
In Europe, the Title Transfer Facility (TTF) was trading around $10.54 per MMBtu on 21 May, up 12% from last week.

Asia
Asia remains the preferred destination of US free-on-board (FOB) LNG cargoes as the arbitrage has been mainly open for May.

Consequently, we may see additional US-origin LNG being offered in Asia for June and July delivery, though the majority of US-origin LNG has been discharged into Europe since last year.

Demand-wise, Indian importers such as state-run Gujarat State Petroleum Corporation (GSPC) bought a cargo for around $11 per MMBtu for late June or early July delivery.
Meanwhile, Indian Oil Corporation (IOC) and Gail were seeking cargoes for June delivery on 21 May.
South Korean importer Posco purchased a spot LNG cargo for 24-26 July delivery, while Korea Midland Power is seeking a cargo for 10-11 July delivery.

Some Japanese importers are seeking July delivery cargoes.
Local utility Tohoku Electric Power, for example, is seeking another mid-July delivery cargo with a preference for high gross heating value, after purchasing June and July delivery earlier this month.

Kansai Electric Power Company was also seeking LNG for July delivery as its 900-megawatt (MW) Maizuru coal power plant unit 1 halted operation on 9 May and will remain offline until 5 July.
Additionally, its 900 MW Maizuru unit 2 will remain offline until 29 July, according to a filing with the Japan Electric Power Exchange.

In Japan, major power utilities reported on 22 May combined LNG storage levels of 2.26 million tonnes (Mt) for 19 May.
This is up 6.6% week-on-week and 7.1% higher than the five-year average from 2018-22 for the end of May.
However, it is 6.2% lower than the 2.41 Mt reported at the end of May 2023.

In South Korea, the 1.1-gigawatt (GW) Shin-Wolseong Unit 2 nuclear power plant went offline on 19 May, and as of 21 May, the restart date remains unknown.

Europe
LNG for delivery to Norwest Europe is 5.5% higher week-on-week, rising to approximately $10.1 per MMBtu on 20 May.
Total pipeline flows from Norway into Europe were up 10.7% week-on-week to approximately 321.8 million cubic meters per day (MMcmd) on 16 May.
Gullfaks, Kaarsto, Kollsnes, Kvitebjorn, Troll and Visund are currently undergoing planned maintenance, while Oseberg and Sleipner completed maintenance on 17 May and 19 May, respectively.
Meanwhile, gas pipeline flows from Russia to Europe were up 3.5% week-on-week to approximately 96.09 MMcmd as of 20 May, which is also higher than the 66.18 MMcmd on 20 May 2023.

US
Strong crude oil production in the US continues to contribute to significant levels of associated natural gas production.
As such, domestic gas prices remain in the sub-$3.00 per MMBtu region, albeit observing some material improvement in recent weeks, with Henry Hub prompt month hovering near $2.70 per MMBtu, as of 20 May, due to surplus production, muted domestic demand, and limited export capacity.

The latest US Energy Information Administration (EIA) report indicates a slightly smaller-than-expected 70 billion cubic feet (Bcf) increase in natural gas inventories for the week ending 10 May.
Storage facilities currently hold over 2.6 trillion cubic feet of gas, with stocks up 17.5% year-on-year and 30.8% above the five-year average.

There has been an increase in gas flows to LNG export plants, notably with Freeport LNG in Texas back online after maintenance, although there were brief outages at Freeport Train 2 on 16 May and Corpus Christi LNG Train 1 on 20 May.
As of 20 May, total US LNG exports averaged 12.3 Bcf per day (Bcfd).
With Freeport LNG contributing nearly 2 Bcfd, we estimate LNG exports are up 5.8% compared to April levels.

Total gas consumption is anticipated to see an uptick in the coming weeks, with increased temperatures on the horizon.
The rise in demand for natural gas is fueled by warmer weather prompting heightened power generation for air conditioning needs.
Latest weather forecasts anticipate mostly normal weather across the Lower 48 states until June, with warmer-than-normal days expected over 17-25 May.

However, some reductions in gas-for-power demand are expected in Texas after a tornado in Houston on 16 May caused over 900,000 customers to lose power at the peak of the outage.
As of 20 May, more than 200,000 are still without power.
The severe damage to transmission and distribution electric systems has hindered gas demand for power generation.
Restoration efforts are ongoing, but full recovery may take longer for the hardest-hit area.
The impact comes just as temperatures in the state are heating up, with weather forecasts predicting higher temperatures throughout 26 May.