Gas prices in Europe are falling, but the Middle East premium is still there
The Dutch and British wholesale prices of gas fell on Thursday morning, but they remain close to their highest levels in a week as fears persist about disruptions in gas production in the Middle East due to the intensifying conflict in that region.
LSEG data shows that the benchmark front-month contract for the Dutch TTF Hub was down 0.20 euro at 38.47 Euros per Megawatt Hour (MWh), which is $12.45 mmBtu at 0850 GMT.
The British equivalent fell by 0.10 pence to 96.30 pence a therm.
One trader stated that the focus will remain on the Middle East, and any significant shifts in LNG output if Israeli production is affected.
Chevron temporarily halted natural gas production on the Tamar- and Leviathan-platforms off the coasts of Israel, but has resumed its operations since.
Goldman Sachs analysts wrote in a recent note that they believe the recent tightening due to potential Israeli production disruptions increased the risk of a price spike in European markets in the winter.
They added that a sustained disruption at the Leviathan gas field and Tamar could result in a net tightening by 9 billion cubic meters (bcm), or 1.7%, of global LNG supplies.
In a morning press briefing, analysts from Northern Gas and Power stated that "increasing Norwegian flows as the heavy maintenance period nears its conclusion, combined with temperatures at seasonal normal levels, will ease the impact the conflict has on the economy."
The day-ahead contract on the British market was 0.50 pence lower at 93.00 cents per therm.
Gassco, the infrastructure operator, reported that Norwegian exports to Europe, including Britain, are now at 290 million cubic meters (mcm)/day, up from just 278 mcm/day as of Wednesday.
Gazprom, the Russian gas company, said that it will send 42.4 million cubic meters of gas via Ukraine to Europe on Thursday. This is the same amount as was sent on Wednesday.
Gas Infrastructure Europe reported that Europe's storage of gas was 94.34% filled, which is a slight decrease from day to day.
The benchmark EU carbon permit contract rose 0.27 euros to 62.87 euro per metric tonne.
(source: Reuters)
