European natural gas futures posted a third weekly gain as concerns over potential strikes in Australia inject renewed volatility into the market.
Benchmark futures soared more than 18% on Tuesday, before partially retreating through Friday. Still, the moves have left the contract 3.1% up this week and almost 30% higher this month.
The possibility of walkouts at three liquefied natural gas facilities operated by Chevron Corp. and Woodside Energy Group Ltd. has taken center stage in recent days, as traders monitor negotiations. Strikes — if they go ahead — could disrupt global supplies and increase competition for the super-chilled fuel.
Workers at key Chevron LNG facilities are scheduled to begin voting Friday on industrial action, according to the Offshore Alliance, a group representing two major labor unions.
Read more: Key dates to watch in Australia LNG labor negotiations
Traders are weighing supply risks against rising stockpiles in Europe, which are now 90% full — well ahead of the European Union’s Nov. 1 target date for that level. Still, robust inventories may not be sufficient to see the region through the winter, and heavy maintenance is expected at facilities in Norway.
“Storage levels remain well above seasonal averages,” Rabobank Senior Energy Strategist Joe DeLaura wrote in a note. “There is a solid cushion for the fall and early winter that will prevent too much price appreciation even if we see late summer heat or an early cold snap.”
Dutch front-month futures, Europe’s gas benchmark, fell 1.13% to close on Friday at €36.41 a megawatt-hour by 6 p.m. in Amsterdam.
--With assistance from Priscila Azevedo Rocha and Elena Mazneva.
