Nymex natural gas futures are unlikely to change significantly from the US-Israel war on Iran unless the conflict is prolonged, despite robust demand for US LNG, analysts said.
Gas for April delivery at the Henry Hub, the delivery point for gas traded in the Nymex futures market, on 9 March fell by 7¢/mmBtu, or 2pc, to settle at $3.12/mmBtu. The upheaval in in oil futures or European gas prices, highlight how the US, the world's largest exporter of LNG by volume, remains insulated from a global gas supply crunch.
"In the short-term, the war would have little to no impact on Henry Hub prices", Baker & O'Brien consultant Kent Bayazitoglu said.
US LNG exporters have little ability to boost supplies into the global market because they already operate near capacity.
The 10-day moving average for daily US LNG exports on 27 February, the week leading up to the attack was 378,000t, equivalent to a pace of 137.98mn t/yr, according to ship-tracking data from Kpler. This equals a 99.6pc utilization rate of aggregated peak capacity. The 10-day moving average on 8 March was 371,000t, a pace of 135.2mn t/yr and a utilization rate of 97.6pc.
Additional marginal volumes would come from the two projects undergoing commissioning in Texas: Cheniere's 11.45mn t/yr stage 3 expansion project at Corpus Christi LNG and the first train of QatarEnergy and ExxonMobil's 18.1mn t/yr Golden Pass LNG. But nearly all volumes they send out have already been contracted, Bayazitoglu said.
The conflict has pushed European and Asian LNG prices to multi-year highs and has halted shipments through the strait of Hormuz, the only shipping lane out of the Mideast Gulf.
QatarEnergy announced shortly after the attacks that it would cease all LNG production, cutting off supplies from Qatar's 77mn t/yr Ras Laffan and the UAE's 6mn t/yr Das Island export terminals that primarily serve Asian markets.
If production is halted for a prolonged period and US LNG utilization rates remain elevated through the summer, Henry Hub prices could begin to face upward pressure, Enverus Intelligence Research senior analyst Josephine Mills said.
Last week President Donald Trump said the US was prepared for its military campaign against Iran to last four to five weeks, but his remarks on 9 March seemed to suggest a longer conflict was possible.
