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Explosion at U.S. Facility will end downward market trend

Close price: Prices closed marginally down, helped by a ramp up in Norwegian gas flows into the UK following maintenance and a softening carbon market with the news the market won’t be tighten yet for permits.

Opening price: The markets were starting to trend quite nicely downward as the supply picture was looking good for the summer. That trend is going to come to a halt, as an explosion at the U.S Freeport in Texas occurred last night, which is estimated to keep the facility out of action for at least 3 weeks.

Freeport LNG is one of the largest U.S Exports plants producing Liquefied Natural Gas providing around 20% of U.S. Processing. As we know, the UK and Europe have become increasingly reliant on this source of energy, and as such the breaking news has sent prices much higher. As the damage is accessed, we will get more estimates on timescales. A 3-week closure which is currently estimated would certainly be disruptive on short term supply but not Disastrous. A much longer period would place much more worry into the markets.