EUROPE GAS Benchmark hits 13-month-high on lower Russian flow and colder outlook
On Monday, the European benchmark gas contract reached its highest level for 13 months as Russian gas flows via Ukraine were slowed down slightly. Colder weather was forecast and gas storage levels continued to fall in Europe.
By 0912 GMT, the benchmark front-month contract for the Dutch TTF Hub rose by 1,18 euros to 49.08 euro per megawatt hour(MWh), or $16.12/mmBtu.
Early trade briefly reached 49.22 Euros/MWh, the highest intraday rate since November 6, 2023.
The day-ahead contract in Britain gained 5.20 pence, to 121.50 cents/therm.
In a morning report, Auxilione stated that "physical flow nominations from Russia via Ukraine dropped over the weekend and remain unchanged today."
Gazprom, the Russian gas producer, said that it will send 40.8 million cubic meters (mcm), of gas via Ukraine to Europe on Monday. This is a drop of 3% compared to recent months when more than 42 mcm/day were sent.
Auxilione said, "The market already reacted to the decline in nominations this morning and we're now back at high prices."
A trader reported that the weather forecasts for Dec. 11 through the end of December had become colder.
"...which, again, looks like it will keep storage withdrawals at a high level," he said.
Gas Infrastructure Europe has released the latest figures showing that Europe's storage sites for gas are 85.47 percent full. This is ten points less than the 2023 period.
Analysts at ING warned in a morning report that "lower-than-expected gas storage combined with the prospect that Russian gas piped via Ukraine will cease at the end this year" is a concern for the market.
Analysts said that the European Commission increased its EU-wide target storage level for February, from 45% to 50 %, last week. This has helped support prices.
The benchmark contract on the European carbon markets was up 1.51 euros, at 69.91 euro per metric ton.
(source: Reuters)
