A weak economic outlook and waning demand brought on by extreme efforts to halt the spread of the coronavirus across the continent have caused natural gas prices to spiral in Europe, a major destination for U.S. liquefied natural gas (LNG).

The April Dutch Title Transfer Facility (TTF) contract fell nearly 6% on Monday to $2.867/MMBtu, while the UK’s National Balancing Point (NBP) lost more than 4% to finish at $2.812. TTF slid even more on Tuesday, settling at $2.736, while NBP plunged to $2.708.

In Italy, which has been hardest hit by the virus and locked down since last week, gas demand for power generation has declined by nearly 20%, while industrial gas use has declined by almost 10% compared to the same time last year, according to French energy management firm Schneider Electric. Wood Mackenzie said Tuesday that power demand in the country has fallen by 8% from the previous week.

“European gas generators will bear the brunt of demand loss where, despite low LNG prices, a carbon price decline bolstering coal and supply swings from variable renewables generation during the relatively productive spring period will be a significant determinant of gas demand,” Wood Mackenzie said.

Demand is likely to sag further across the continent as more countries have announced lockdowns and other measures to better manage the spread of the virus. The efforts come at a time when European natural gas storage inventories are high, LNG imports are up and prices already face downward pressure given the supply glut.

As long as there’s a positive difference between the U.S. loading price, less variable costs such as shipping, and the foreign sale price of LNG, offtakers will move cargoes from the United States, even at just a few cents.  But the virus presents another threat for global gas prices  and already thin Gulf Coast netbacks. Henry Hub also came under pressure on Tuesday amid broader market turmoil and the prospect for U.S. demand destruction amid the outbreak, with the April contract falling 4.7% to settle at $1.729.

The LNG sector has also had to navigate a collapse in oil prices over the last week. The slide has created both opportunities and hurdles for the super-chilled fuel. While projects with more exposure to oil prices could be delayed given crude’s steep decline, lower prices have made the fuel more competitive in some parts of the world, particularly for long-term buyers in Asia with crude-linked contracts that haven’t enjoyed the benefits of cheap gas on the spot market.

“It has been one of the most dramatic weeks in the history of the oil and gas industry, of which we and other market players are still trying to grasp what the real ramifications might be for the LNG markets,” said shipbroker Fearnleys AS last week, when Italy locked down, other countries began taking restrictive measures and the United States limited travel from Europe. “The oil price crash and wildly spreading Covid-19 virus have left many wondering what the rest of the year might entail and how one can adjust their forward views amidst this volatility and uncertainty.”

In Asia, things have stabilized somewhat, with less floating storage near China, the epicenter of the outbreak, and more cargoes headed to the country. Prices are recovering there and have moved well above $3.00 both on the spot market and the forward curve.

Europe was an even more important destination when the coronavirus broke out in China and nearby countries. Asia could play a similar role now that the virus is spreading in Europe.

If Europe-bound cargoes are eventually diverted, they’re all likely to end up in Asia, Kpler LNG analyst Nathalie Leconte told NGI late last week. For example, India, Bangladesh and Pakistan all have been opportunistic buyers as of late, taking advantage of historically low prices in the spot market.

In any event, U.S. cargoes headed to Europe will be insulated by long-term contracts from any demand destruction. U.S. contracts also don’t include clauses restricting destinations, so spot cargoes can easily find a home elsewhere if netbacks continue to be positive.

Feed gas deliveries continued to undulate in the Lower 48 as this week got underway. Genscape Inc. said Monday that an unexplained outage at Cheniere Energy Inc.’s Sabine Pass terminal resulted in a 1 Bcf day/day drop in pipeline shipments to U.S. terminals. NGI’s U.S. LNG Export Tracker showed a drop over the weekend, but volumes appeared to bounce back on Tuesday.

Dense fog and maintenance since last month have impacted feed gas volumes. Cheniere subsidiary Sabine Pass Liquefaction LLC has taken out storage capacity at the Pine Prairie Energy Center in Louisiana from March 18 to March 31. Sabine Pass took out short-term storage last month and in 2019 when heavy fog prevented ships from entering the terminal.

Fog is expected to continue to factor into forecasts near Port Arthur through March 22, according to forecasts. The ship channel there was closed on Tuesday due to fog.

The weather has cut into overall exports. Fourteen LNG vessels departed the United States carrying 51 Bcf during the week ending March 11, according to the Energy Information Administration. That’s compared to the 15 vessels that left carrying 53 Bcf in the prior week.

Elsewhere, FERC suspended its environmental review schedule for Commonwealth LNG, the 8.4 million metric tons/year export terminal proposed for Cameron Parish, LA. A draft environmental impact statement (EIS) was due for the project in May, while the final EIS was due in October under the original schedule.

But the Federal Energy Regulatory Commission said the original schedule was based on “timely responses to any data requests” for the review. Commonwealth has said it would meet outstanding requests through July, prolonging the review.

Meanwhile, Sempra Energy’s Cameron LNG export terminal in Louisiana received FERC approval on Friday to introduce hazardous liquids to Train 3, keeping the liquefaction unit on track to enter service in 3Q2020.