What’s happening in the markets and why?
Whilst the gas market keenly awaits on further news from Australian LNG strikes, the focus so far this week has been on Norwegian maintenance. Late yesterday afternoon, Gassco announced once again further delays to the return of Troll, pushing prices higher and reversing losses seen on Monday. With growing frustration of daily changes, Equinor announced that production has resumed at the Troll A platform in the North Sea, with full output expected over the next few days, this morning.
Prices were also supported after a tender for spot LNG cargoes indicated a comeback of Chinese LNG demand. China’s Sinopec Corp bought more than 30 cargoes of LNG via a tender for October 2023 to the end of 2024 to cover Chinese winter demand, traders said.
Over in Australia, Chevron and unions held another round of talks on Wednesday in hopes to come to an agreement ahead of the tribunal on Friday. Unfortunately, despite “meaningful negotiations”, talks ended without a deal meaning the tribunal will go ahead on Friday. The tribunal which only has one day of hearings scheduled, will decide whether to intervene and halt the strikes which escalated to two 24-hour work stoppages over the weekend.
What should energy buyers look out for?
Prices are expected to remain volatile, particularly if there are any fresh updates to the outage schedule 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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