Prices of EUROPE GAS are rising as the Ukraine Gas Transit Agreement expires

The Dutch and British wholesale prices of gas rose slightly on Tuesday morning, as the weather forecast for this week is colder and Russian gas supplies to Europe through Ukraine are expected to cease.

According to LSEG, the benchmark front-month contract for the Dutch TTF Hub increased by 0.38 euros to 48.23 Euro per megawatt hour at 0913 GMT.

The TTF contract for February was up by 0.33 euros to 48.55 Euro/MWh.

Gazprom, a Russian gas company, said that it would pump a smaller volume of gas into Europe via Ukraine starting Tuesday. The flow of gas is expected to drop to zero in the early morning hours of January 1 following the expiration of the transit agreement of five years between Ukraine and Russia.

Gazprom has announced that it will send 37.2 mcm of gas on Tuesday, compared with 42.4 mcm Monday.

The weather in North-West Europe is predicted to get colder in the second half of this week, which could increase demand for gas.

The day-ahead contract in Britain rose 2.95 pence, to 120.45 cents per therm. This is its highest level since December 3.

Analysts at MET Group said that, "looking ahead to 2025 the LNG market could face upside risks despite the forecasted increase in supply from the U.S.

"Delays in capacity additions or stronger-than-expected demand from Asia - driven by economic recovery or cold weather - could tighten the market," they said.

The buffer of gas in Europe could shrink if geopolitical disruptions continue, increasing volatility. They added that the industry is on high alert for any unexpected events which could shift the balance of supply and demand quickly.

The benchmark contract on the European carbon markets was 0.93 euros higher, at 72.91 euro per metric ton.

(source: Reuters)