The global natural gas market has been largely immune to the potential impact of the new coronavirus Omicron strain, in stark contrast to crude oil, analysts said. Brent dropped more than 11% on November 26 to $72.72 per barrel when the World Health Organisation announced Omicron was of concern. But that route was not replicated in gas markets. The Asian benchmark spot price dipped just 3.6% to $34.89 per MMBtu on November 26 but then reversed the loss at $36.25 per MMBtu on November 29.
Chinese, Japanese, and Korean importers continued buying spot LNG cargoes, although inventories in these countries were reported at comfortable levels. Yet, northeast Asian utilities continued restocking as they wanted to avoid a repeat of last winter when a cold snap left them short of fuel. Ship-tracking data showed the volume of LNG delivered to these three countries climbed to 16.52 million tons in November, the highest since July and compared to 15.2 million tons in October.
In Europe, natural gas prices for January delivery at the Dutch TTF hub also dropped by 5.3% to €88.50 ($100.17) per MWh on November 26. However, the contract recouped all of its losses and settled at €94.80 ($107.30) per MWh on November 29 as Omicron concerns were offset by the reality of tight supply and low inventories. European LNG imports rose from 5.96 million tons in October to 6.29 million tons in November. However, reduced supplies from Russia remained a concern.
