Summertime

Global LNG prices will be in a summertime lull until wintertime following a price run-up caused by a pre-summer supply buying spree, according to analysts at Bank of America Merrill Lynch. Still, LNG markets will remain tight in the coming years as import capacity additions continue while liquefaction growth takes a breather.

“Summertime, and the livin’ is…way too hot,” would likely be how George and Ira Gershwin would revise their classic for contemporary times. But despite a heat wave continuing to envelop several market areas, prices retreated to either side of flat in most cases Tuesday and even saw some dives at the previously high-flying Northeast citygates.

Prices continued to fall at nearly all points Monday as summertime cooling load was fairly light outside the southern third of the U.S. The previous Thursday’s downturn of 18 cents by August futures was a further negative influence on the cash market, and the return of industrial demand from a holiday weekend proved to have essentially no bullish impact.

While some analysts and consultants agree that prices are nearing their bottom for the summer and likely will rebound due to an increase in gas demand related to warmer temperatures and the recent price decline, there is disagreement over what will be the “equilibrium” price for the rest of the storage injection season.

Summertime, and the living is downright hot–finally. Moderate to severe heat was uniform in all areas for a change Monday (even up into Canada, where a Calgary source reported afternoon temperatures in the mid 80s). The cash market responded with across-the-board gains that were mostly in the teens.

A number of traders were experiencing early cases of the”Summertime Blues” Monday due to what they perceived as a verylackluster market. “It will be easy to report the prices todaybecause they’ve hardly budged” from Friday, a Gulf Coast marketertold Daily GPI. Another source quoting flat to slightly lowerChicago citygates in the mid $2.00s noted he was “just sitting hereyawning.”