European natural gas prices eased as Woodside Energy Group Ltd. said it was having “constructive” discussions with workers who are threatening to strike at a key export facility in Australia.
(Bloomberg) — European natural gas prices eased as Woodside Energy Group Ltd. said it was having “constructive” discussions with workers who are threatening to strike at a key export facility in Australia.
“We have come to substantive agreements on a number of items,” Chief Executive Officer Meg O’Neill said during a results call Tuesday.
Benchmark futures fell as much as 3.9%, after settling at a two-month high on Monday. Unions said over the weekend that industrial action could start as soon as Sept. 2 at one of Woodside’s liquefied natural gas facilities if no deal is reached in pay talks on Wednesday.
The market is closely watching the discussions as walkouts — if they go forward — risk disrupting as much as 10% of global supplies while Asia and Europe prepare for the winter heating season. Both regions vie for a limited amount of LNG worldwide. Workers at some Chevron Corp. facilities in Australia are also considering strikes.
Read more: LNG Strikes Could Begin Early September Amid Australia Disputes
The possibility of industrial action has lifted futures to around the €40 mark in recent days, and the impact of any such event depends largely on its duration.
“However, if the labor strike is not decided or if production is not disrupted, the market would be so significantly oversupplied with gas and LNG that prices would have to fall ahead of November,” Citigroup Inc. analysts wrote in a note.
Prices are still far below the highs of last year’s energy crisis, and Europe’s gas inventories are at record levels for the season, providing a buffer in the early months of the heating season, which begins in October
Dutch front-month futures, Europe’s gas benchmark, fell 1% to €39.96 a megawatt-hour by 9:04 a.m. in Amsterdam.
–With assistance from Anna Shiryaevskaya.
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