EUROPE GAS-Prices rise amid Ukraine concerns, strong demand
Dutch and British wholesale prices for gas rose Monday morning, as market demand and concerns about a possible peace agreement with Ukraine supported the market.
According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was up 2,19 euros, or 14,19/mmBtu at 46,50 euros per Megawatt Hour (MWh), by 0914 GMT.
The Dutch May contract increased by 2.15 euros to 46.80 Euros/MWh.
The day-ahead contract in the British market was up 3.80 pennies at 111.30 pence per therm.
After a clash between U.S. president Donald Trump and Ukrainian president Volodymyr Zelenskiy during discussions at the White House last week, uncertainty about a Ukraine deal was looming over the market.
In a daily note, Auxilione analysts said: "There is no doubt the energy markets are showing concerns this morning."
"Europe (or at least parts of it) will try to find a peace solution and seek U.S. approbation." Analysts said that some European countries had already expressed concern about this. Prices are expected to be volatile in response to any news.
Fundamentally, the gas demand is also strong. Prices are still recovering after dropping from a high of 59.27 euro/MWh, reached on February 11, a level that was two years ago.
Greg Molnar is a gas analyst with the International Energy Agency. He said that "European demand for gas surged by 20 percent in February. This was the strongest increase year-over-year since April 20, when the market was still recovering after the COVID locksdowns."
The power sector was the biggest contributor, where gas consumption jumped by 60% year-on-year. This was again mainly due to lower wind output which fell by almost 40% year-on-year," he wrote in a LinkedIn post.
The benchmark contract on the European carbon markets was up by 1.07 euros at 72.07 Euros per metric ton. (Reporting by Susanna Twidale, editing by Nina Chestney).
(source: Reuters)
