Prices rise in Europe as the colder weather increases gas demand
Dutch and British wholesale prices for gas rose on Thursday, as the colder weather drove up demand for gas to heat homes. Meanwhile, the market was closely monitoring developments regarding a possible ceasefire agreement between Ukraine and Russia.
LSEG data shows that the benchmark front-month contract for the Dutch TTF hub rose 0.93 euros to 42.78 Euro per Megawatt Hour (MWh) or $13.63/mmBtu at 0916 GMT.
The British day-ahead contracts was up by 2.00 pence to 107.00 pence a therm.
In a morning report, Engie's Energy Scan analysts said that "the fall in temperatures below the normal level continued to drive gas demand" (for heating).
The temperature forecast for the working days of next week (18-21 March) has been adjusted to a slightly colder level. Saku Jussila, LSEG analyst, says that the demand for heating will increase by 183 gigawatt hours per day (GWh/d).
The Kremlin announced on Wednesday that it would examine details provided by Washington regarding a proposal for 30-day ceasefires in Ukraine before responding. Meanwhile, U.S. secretary of state Marco Rubio expressed his hope that a deal could be reached within a few days.
Two people with knowledge of the situation said that Russia had presented Washington with a demand list for an agreement to end the Ukraine War and reset relations with United States.
North Asia LNG prices increased on signs of higher demand. The stockpiles held by Japanese power producers of LNG fell by 9.6%, the lowest level for three months. This prompted Japanese buyers to look for additional LNG cargos, according to Daniel Hynes senior commodity strategist at ANZ.
The biggest risk for Europe is Asian demand, especially if they have to compete with each other for the cargoes that will fill their rapidly diminishing storage.
Gas Infrastructure Europe reported that EU gas storage facilities were at last 26.23% full. The EU has a target of 90% filling by November 1.
The benchmark contract on the European carbon markets fell by 0.06 euros to 69.56 euro per metric tonne. (Reporting and editing by Louise Heavens; Marwa Rashed)
(source: Reuters)
