(Greg Molnar) No pain, no gain: after months of depression, gas benchmarks recorded strong gains in August across all major gas consuming regions.
The undisputed champion was TTF, jumping by an impressive 50% on the month, driven by a particularly strong demand recovery (5% yoy mainly due to pow generation) and lower LNG influx (down by 3% yoy).
In Asia, JKM MA prices gained 45% on the back of higher demand from China (up by 10%), supply issues at Gorgon T2 and upward pressure from TTF (the Asian spot premium now recovered to $1/mmbtu).
Meanwhile, oil-indexed prices are moving in the opposite direction, softening towards ~$6/mmbtu as the lower oil prices of Q2 are filtering through the long-term import contracts.
In the US, Henry Hub rose by 30%, as production is now falling more sharply (-4%) than demand (-2%) partly due to lower supply from associated gas in the Permian. meanwhile, net imports from Canada jumped by 10% providing upward pressure for AECO (up by 27% mom and almost three-fold yoy).
What is your view? will the August bull run continue through September? Or there are some bears on the horizon? any major up/downside risks?
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