• In the past month, US natural gas prices moderated slightly on milder weather, but remained around 13% more than the same time last year on extremely low inventories.
• In contrast, the slide in European gas prices continued in May on low heating demand on the back of a streak of warmer than usual temperatures, following the mildest winter in seven years which left the region’s inventories more than half full.
• Russia’s Gazpromhas finally signed a landmark gas supply deal with China on 21 May, after a Memorandum of Understanding was struck in 2006. The deal would see the company supply 38 billion cubic metres of gas to China annually for 30 years, reported to be worth around US$400 billion. This will lessen the pressure of US and EU sanctions on the energy-reliant nation.
• Ukraine and Russia continued to be locked in disputes over gas price negotiations. Ongoing geopolitical tensions between the two countries suggests that a cut in gas supplies by Russia is still a possibility, albeit minute, but a comfortable supply side should help to allay any fears of an immediate supply shock.
• US natural gas production continued to proceed at record pace, and traction is also building on the exports front as a legislation is passed to limit the length of review time by the Department of Energy for LNGexport applications to 90 days.

For further analysis download the full report.

• Natural Gas Market Update – May 2014 (PDF, 232KB)