European spot gas markets have stabilised at the start of summer and demand is continuing to fall from the record highs seen in several countries in early February.
The outlook for demand will focus on the need for summer injection into storage sites, which saw rapid withdrawals comparatively late in the winter.
The lack of transparency on imported forward LNG deliveries and concerns over jumps in LNG demand from South America, Asia and the Middle East could again support European spot forward summer pricing as the region becomes more dependent on imports.
Greater information transparency at a European level, however, means the market will have more visibility over production maintenance in key areas such as Norway and the UK North Sea.
Changes to European long-term contracts will see the price synergy with spot markets increase, but buyers will still look to the UK market as a potential source of cheaper imported spot gas over the summer.
Growing cross-border trade between northwest European markets will limit the duration of any significant price differences at neighbouring hubs.