Gas prices in Europe are falling, but the geopolitical risks remain.

The Dutch and British wholesale prices of gas fell on Friday morning due to a steady supply. However, the market is still closely watching the Middle East situation as there are still geopolitical concerns.

LSEG data shows that the benchmark front-month contract for the Dutch TTF hub fell 0.38 euros to 39.70 Euro per Megawatt-hour (MWh), which is $12.73/mmbtu at 0809 GMT.

The day-ahead contract in the British market was down 1.25 pennies at 97.25 pence/therm.

LSEG data show that total Norwegian exports were up by 6 million cubic meters a day at 243 mcm/d.

The supply from Russia via Ukraine to Europe also remained constant.

Gazprom, the Russian gas company, said that it would send 42.3 millions cubic metres of natural gas to Europe through Ukraine on Friday. This volume is in line with previous days.

Gazprom said it also signed a memo with Hungary regarding a possible increase of sales of Russian Gas.

In a daily report, Auxillione stated that "Hungary has suggested that the Turkstream pipeline could provide additional capacity to offset some of Ukraine's loss of flow at the end the year."

The prices will remain supported due to the fears of escalating tensions across the Middle East.

Energy Aspects analysts said that market participants were concerned about damage to Israeli infrastructure, which would lead to a greater demand for LNG in the Middle East.

The analysts stated that "if things worsened, which is not to be discounted, then the risks would center on the concern over ships using Strait of Hormuz, and a far greater disruption of LNG supply if Qatari exports of gas are disrupted."

The benchmark contract on the European carbon markets fell 0.70 euros to 64.30 euro per metric ton.

(source: Reuters)