LNG Short-Term Outlook - June 2021

European tightness: European inventory remains at the bottom of the five-year range, in part due to a late winter cold snap. Narrow summer-winter spreads did not incentivise speculative injections meaning Europe will now likely enter winter 2021/22 with inventory still significantly below its five-year average. However it is the strong carbon and coal prices that have continued to raise the coal-to-gas switching band, which TTF is pricing against, and this has largely supported Atlantic LNG prices. Cargo flows into North-West Europe have remained high as a result, and we’re now looking at record imports of 39 Mt into Belgium, France, the Netherlands and the UK this year. Looking forward, the largest area of uncertainty remains the timing of the Nord Stream 2 commissioning and gas ramp-up, which will play a key role in reducing European - and hence Atlantic - LNG prices going into 2022...