ENN Energy aims for sub-zero gas prices

Bloomberg

One of China’s biggest natural gas distributors flagged the possibility of sub-zero market prices at its shareholder meeting, a scenario that would echo oil’s record plunge last month that stunned global markets.
Gas prices could turn negative due to a lack of storage capacity, Wang Yusuo, the billionaire chairman of ENN Energy Holdings Ltd, said. He didn’t specify any particular region or benchmark, and added that any dip into sub-zero territory would be short-lived.
While lower gas prices would benefit ENN through cost savings on imports, Wang’s comments serve as a warning to gas traders that the spectacular collapse in oil markets might befall them. US oil futures plunged to negative $40.32 a barrel on April 20, an unprecedented level in the world’s most liquid crude oil contract and which inflicted billions of dollars in investor losses.
“For natural gas, I have heard about the possibility of negative prices. I also think it could happen,” Wang said. “That’s because natural gas has even more limited storage capacity and its production is also more rigid. So it may happen. But I don’t think it will be a dominant or long-lasting scenario.”
Gas price benchmarks across Asia, Europe and the US have all traded near record-low levels this year amid a glut of supply and lackluster demand as the coronavirus paralyses economies.