AUSSIE BONDS: ACGB Dec-35 Supply Digested But Less Demand

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Natural gas prices were up on Friday and finished the week higher as supply concerns came to the fore at a time of an expected pickup in cooling demand. On the demand side, US-China trade talks scheduled to take place in London on Monday are hoped to reduce risks to global energy consumption from increased protectionism. Europe rose 0.3% to EUR 36.51 after a high of EUR 36.85 followed by a low of EUR 35.87 leaving it up 6.7% on the week. 

• With refilling of European storage ahead of next winter a concern, the market remains sensitive to supply disruptions, especially as temperatures are forecast to rise across most of the region.
• Norway is currently engaging in significant scheduled maintenance but there was also an unplanned disruption at its major Troll field on Friday. Inventory building will be impacted by an increase in demand elsewhere in the world, especially as summer progresses.
• US gas rose 2.9% to $3.79 to be up almost 10% last week after rising to $3.82. It was supported by expectations of warmer weather boosting cooling demand in the second part of June. It has started Monday trading 1.2% lower at $3.74.
• Prices have overlooked the large addition to storage and scheduled maintenance reducing demand for LNG processing.
• US lower-48 gas production rose 4.7% y/y while demand fell 1.1% y/y on Friday.
• Net-long positions in US Henry Hub futures rose 46.9k to the most bullish level in seven weeks according to CFTC data reported by Bloomberg. 

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