© Bloomberg. Gas pipes sit near a liquefied natural gas (LNG) storage tank under construction, left, at Tokyo Electric Power Co.’s (Tepco) Futtsu gas-fired thermal power plant in Futtsu, Chiba Prefecture, Japan, on Monday, Sept. 10, 2018. Japan will maintain a target for clean energy to account for as much as 24 percent of the countrys power mix by 2030, according to a long-term plan approved by the Cabinet in July.
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(Bloomberg) — European natural gas rose amid signs China’s economy may have have bottomed and a recovery could pull supply away from the West.
Benchmark futures advanced as much as 4.6%, after settling 14% lower on Monday. The outlook for Chinese demand is key for Europe with a major part of the winter still remaining, and as a brief cold wave moves through the region this week. Lower supply from Norway also contributed to pushing prices higher on Tuesday.
Traders will be focusing on how quickly China can recover from Covid restrictions. Gross domestic product rose 3% last year, far lower than the 8.4% in 2021, but above economists’ forecasts. It also beat expectations in the final quarter of the year.
While full gas reserves are forcing some Chinese buyers to consider diverting LNG cargoes, a quick economic recovery could boost consumption and increase competition for supplies with Europe, especially if it also gets cold there. Others in Asia, such as India and Thailand, are also rapidly returning to the LNG market to take advantage of lower prices.
“China’s demand is definitely going to rebound, but whether it’s going to reach the peak of 2021, there seems to be some doubt,” Rob Butler, a partner at law firm Baker Botts LLP, said in an interview. “The general consensus is it will rebound but probably not as high as it was previously.”
CHINA REACT: GDP Beat Still Leaves Hole for Recovery to Fill
, Europe’s gas benchmark, were 2.8% higher at €57 a megawatt-hour at 8:49 a.m. in Amsterdam. They fell to the lowest intraday level in 16 months on Monday.
©2023 Bloomberg L.P.
