What’s happening in the markets and why?
Support was seen in the UK and European gas markets towards the end of last week and earlier this week as Chevron workers at the Gorgon and Wheatstone LNG facilities started work stoppages.
The latest in the Australian LNG saga is that Chevron has asked Australia’s Fair Work Commission to intervene in its dispute with workers, hoping on new laws that came into effect in June, which empower the industrial arbitrator to force parties into an agreement they themselves are unable to make. The dispute between Chevron and workers will be heard by Australia’s industrial relations tribunal on 22nd September. The markets saw this as positive news with losses seen on Tuesday. However, we expect volatility to remain as workers are preparing for two weeks of 24-hour strikes from Thursday.
In addition to this and much closer to home, Norway has continued to make adjustments to planned maintenances, although the market is hopeful a large proportion of flows should be back within the next few days.
The market also keeping a close eye on the US Freeport LNG facility which has seen gas intake fall well below capacity for a fourth day according to LSEG data. After the plants full shutdown in June 2022 due to a fire, an outage at the facility would add to market concerns over global LNG supply given the Australian LNG situation.
What should energy buyers look out for?
Further potential supply disruptions coming either from changes to the Norwegian maintenance schedule, US LNG via Freepoint or escalation of the LNG strike action in Australia.
What would you recommend?
If you are on a flexible supply contract and have not started hedging for the winter period but need a level budget/price certainty, then we would recommend you start looking into this period given the recent drop off in prices.
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