EUROPE GAS-Prices increase on TurkStream news and wider supply concerns
Dutch and British wholesale prices of gas rose on Monday due to reports about attempted attacks on Russian pipelines, low levels of storage, new U.S. energy sanctions and forecasts that the weather will be colder and less windy.
LSEG data shows that the benchmark front-month contract for the Dutch TTF Hub was up 1.78 Euros at 47.19 Euros per megawatt hour, or $14.11/mmBtu by 1021 GMT.
The British front-month rose 6.82 pence to 120.07 p/therm.
The Dutch day-ahead rate was 1.77 euros higher at 47.60 euro/MWh while the British equivalent increased 7.50 pence to 122.00 pence/therm.
A trader stated that prices are likely to react to unverified claims from Moscow that Ukraine attempted to attack a part of the TurkStream infrastructure, which transports Russian Gas to Europe via Turkey.
This is the only option left for Russian gas to reach Europe, after the transit through Ukraine was stopped at the beginning of this year.
Analysts at Engie EnergyScan stated in a morning briefing that curve prices had already been taken into account when the United States implemented some of the most severe sanctions against the Russian oil sector to date.
They added that while it would primarily impact oil prices, the increase in Asian willingness to pay for LNG could also lead to increased competition between European and Asian buyers.
Wayne Bryan, LSEG analyst, said: "We expect the prices to be supported by the latest weather developments since Friday which have raised (local distribution zones) LDZ expectations."
He said that this was especially true for demand over the weekend and in the coming week. Wind generation would also be softer, which would further support prices.
Bryan stated that the SUM-25 contract would be further pushed backwards to the WIN-25.
Gas Infrastructure Europe data showed that Europe's storage sites for gas are currently 66.38% full. This is about 16 percentage points below where they were a year earlier.
Summer prices are higher than those for winter next year due to the need to replenish storage after winter.
The benchmark contract on the European carbon markets was up by 1.65 euros, at 76.50 euro per metric ton.
(source: Reuters)
