Commodity Roundup: Natgas futures gain after consecutive weekly loss; oil above $80/bbl

Natural gas futures (NG1:COM) edged higher on Monday after two straight weeks of decline, falling nearly 8% last week on milder weather forecasts and expectation of lower heating demand. However, global gas prices gained amid increasing competition for the cleaner burning fossil fuel and demand in Asia. “Asian buyers remain active as they look to take advantage of the fall in prices over the past month,” ANZ reported. This comes as storms threaten to disrupt supply.

“Two storms off the coast of northern Australia are likely to turn into cyclones, which has seen LNG export facilities such as Gorgon, Wheatstone and Prelude partially or fully close. Disruptions to US supply are also emerging, with flows to the Corpus Christi LNG export terminal falling,” the brokerage said.

Meanwhile, European natural gas futures soared about 8% to approach €29/MWh on Monday, marking the fourth straight session of gains and reaching the highest level since early February due to mounting supply concerns, as per report. Repairs at the Freeport LNG terminal in Texas have led to reduced flows, with work expected to continue through April.

“We remain bullish 2025 Henry Hub price based on midstream issues that could prevent a significant amount of volumes from the Haynesville to reach the Gulf as this LNG facility comes online,” JPM Commodities Research said.

Meanwhile, oil prices extended their gains from the previous week, supported by stronger-than-expected economic data out of China and continued drone attacks on Russian energy plants, raising supply risks.

“The strikes on Russian refineries added $2-$3 per barrel of risk premium to crude last week, which remains in place as we start this week with more attacks over the weekend,” Vandana Hari, founder of oil market analysis provider Vanda Insights told Reuters.

A Reuters analysis found the attacks have idled around 7% of Russian refining capacity in the first quarter. The refining complexes process and export crude varieties to several markets including China and India.

Turning to central banks, investors are keeping watch on the outcome of the U.S. Federal Reserve’s two-day meeting that ends on Wednesday, with much depending on what tone Chair Jerome Powell takes in his post-meeting media conference. Policymakers in Japan, UK, Switzerland, Norway, Australia, Indonesia, Taiwan, Turkey, Brazil and Mexico also meet this week.

Among metals, copper prices were mixed on Monday, with the London contract easing while Shanghai prices hit a record high, in expectation of tight supply.

Retail sales in top consumer China, increased by 5.5% year-on-year in January–February 2024 combined, topping the market consensus of 5.2%, while industrial production expanded by 7.0% year-on-year in January–February.

Elsewhere, the Biden administration is offering a $2.26 billion loan to help Lithium Americas develop a Nevada lithium deposit that’s the country’s largest.