European prices held steadily low at $13.75 per million British thermal units (MMBtu) on 19 April, a weekly decrease of 0.6%.
Summer is approaching, and Europe is in a healthy, safe position as injection season begins, boasting storage levels in the top range of the five-year average.
Storage is 56.7% full at roughly 64 billion cubic meters (Bcm), way above the 2021 and 2022 levels for the same time of the year.
The rate of withdrawal is currently around 78 million cubic meters per day (MMcmd), while the rate of injection is 142 MMcmd.
At a country level, the UK’s storage is 59% full, France is at 29% and Germany at 64%.
Europe continues to demonstrate a thirst for LNG imports too, importing 2.4 million tonnes (Mt) last week, with major buyers including Spain, France and the UK.
The LNG Tanker Malanje is set to arrive in Germany`s Wilhelmshaven on 28 April.
News also came that Germany`s FSRU`s will avoid Russian LNG deliveries going forward, as the country will reduce dependence on Russia.

Gas-for-power generation is likely to see an uptick in the coming months, as nuclear generation takes a hit.
Total power generation from nuclear plants in Europe has dropped to its lowest in more than 30 years, encouraged by worker strikes in France and the closing of plants in Germany.

Most likely availability will be very low in France as well in second and third quarter of 2023, as the strike is a major issue and the overall maintenance cycle they are currently undergoing.

The current weather forecast is predicting a return to normal or above-temperatures next week in Europe.
On a country level, current forecasts for Germany, France and the UK show that the countries will experience above normal temperatures this week.

On supply, Russian flows into Continental Europe have held steady – at around 77 MMcmd in recent weeks – through Ukrainian transit and the TurkStream facility.
However, since April 14, volumes transiting through Turkey have been low with no clear cause.
Planned maintenance for the pipeline is not scheduled until June.
Norway, Europe’s other major gas supplier, is continuing to keep volumes at healthy levels.
On 21 January, exit nominations from the Norwegian Continental Shelf (NCS) totaled 311.2 MMcmd, on the back of maintenance work at gas fields such as Aasta Hansteen, Davlin and Kollsnes and Nyhamna.
The small unplanned outage at Kårstø on 19 April also provided a small impact on Norwegian flows to the continent.

In Norway this week, 26,000 Norwegian private industry workers went on strike, but concern is limited.
Even as the conflict escalate, Norwegian production is unlikely to be unaffected, as the government has the power to intervene to end industrial disputes.

US

Now that winter is firmly in the rearview mirror, US domestic balances are setting up for more volatility in summer Henry Hub prices.

For the week ending April 7, 2023, Lower 48 storage experienced its first injection (+25Bcf) with the bulk coming from the East region (+10 Bcf).

The impact was minimal as prompt-month Henry Hub prices settled at $2.11/MMbtu on Friday (14 April), a 2.5% decline for the week.

Another major narrative in US gas balances has been the resilience in US feedgas since Freeport LNG returned to full utilization; feed gas moved to all-time highs of 14.0 Bcfd, driving US LNG exports to record levels and providing a floor for prices.

As we move into the summer season, feedgas will moderate as facilities undergo scheduled maintenance.

Dry gas production continues to show signs of inelasticity, however shoulder season pipeline maintenance schedules will provide the necessary reprieve especially in the Permian region, where supply levels are insensitive to low gas prices.

Our current forecast for Q2-2023 dry gas production is around 100.1 Bcfd.

We expect Haynesville to remain flat through the summer as prices remain low and regional operators start to drop rigs and slow completions.

Seasonality will start to play a larger role in Appalachia as operators enter the summer maintenance period.

We expect supply to remain flat year-over-year at around 32.9 Bcfd.

On domestic consumption side, Residential/Commercial sectors have been laggards so far in 2023, but with warm summer temperatures incoming, Gas Burns will increase significantly as low prices keep gas-fired generation competitive.

Asia-Pacific

Asian spot LNG prices have also held steady at around $12 per MMBtu this week on persistently high inventory and weak downstream demand.

This week, the trading focus also shifted towards June deliveries.

Even with spot purchases from India and Thailand lately, prices remain bearish.
This week spot buying activity in Northeast Asia is likely to be muted, due to the healthy inventory levels and above normal temperatures.
Current temperature forecast also sees temperatures above normal for Japan and South Korea.
However, Bangladesh is seeking a few spot cargoes for June deliveries, after re-entered the LNG spot market earlier this year.