LNG short-term outlook: August 2023
Price volatility has been high by the possibility of the strikes in Australia. However, the market is still essentially stocked and ready for the upcoming winter. Apart from volatility and risk premiums, the effects of industrial action should be limited unless they last for several months and are coupled with additional unanticipated outages, extremely cold weather, and/or other factors. Although there is a supply risk for September due to the possibility of industrial action at Gorgon and Wheatstone in Australia, all parties will ultimately be motivated to limit the duration. Demand could also be negatively impacted by the potential for a "El Nio" winter, which would be warmer than typical and could eliminate the majority of cross-basin flow into Asia. Weak gas demand in Europe has lowered our forecasted expectation of deliveries.