Higher gas prices historically, if they are sustained, will...

Higher gas prices historically, if they are sustained, will usually & eventually lead to higher thermal coal prices. Bodes very well for WHC.

AFR E. Mazneva 10.8.23 said

"The price of European natural gas jumped above €40 ($67.27) a megawatt-hour for the first time since June amid the possibility of worker strikes in Australia, highlighting market jitters over potential supply disruptions.

Benchmark futures surged as much as 40 per cent, the most since March last year, building on gains in the previous two sessions. Traders are concerned about a long-lasting strike, with analysts at Citigroup predicting it could cause European and Asian LNG contracts for January to DOUBLE (my emphasis).

Workers at Chevron and Woodside Energy Group facilities in Australia voted to strike, which has the potential to disrupt LNG exports from the country, tightening the global market for the fuel. The exact timing of the industrial action – if it goes ahead – wasn’t immediately clear. Labourers could stop with seven days’ notice as early as next week depending on progress at a meeting on Thursday,TheAustralian Financial Reviewreported.

Asian buyers “are likely to bid up LNG imports” to replace Australian volumes if there are disruptions, which would affect Europe as well, said Nick Campbell, a director at consultant Inspired. “LNG has become a baseload supply in the European gas mix, therefore any signs that this flow is at risk leads to support in price.”

Other bullish drivers have contributed to moves in gas recently. They include a drop in LNG imports to Europe last month and increased flows from the region to Ukraine, which has spare storage capacity. Potential delays in Norway’s seasonal maintenance also pose a risk.

It is also possible that this week’s price surge caused a wave of position-covering by investors who previously bet on further declines in gas. Similar moves resulted in extreme volatility in June.

Investment funds’ net-short positions in benchmark Dutch gas futures increased last week, after falling to the lowest level since January a week before, according to data released on Wednesday by market operator Intercontinental Exchange.

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