EUROPE GAS - European benchmark hits 7-week-high on low storage, cold and geopolitics
The benchmark European gas contract reached a seven-week high due to colder weather forecasts and low storage levels, as well as increased geopolitical risk for LNG shipments.
LSEG data revealed that the benchmark 'Dutch front month contract' at TTF hub had risen?0.93 euros to 29.35 euro per megawatt-hour (MWh) or $10.05/mmBtu by 0902 GMT.
According to data, it briefly reached 29,69 euros/MWh - its highest level since 25 November.
The Dutch day-ahead contracts was up 0.60 euro to 29.60 euros/MWh.
The British gas day-ahead price increased by 3.65 pence to 77.00?pence per thermo.
Analysts at Mind Energy wrote in a note every day that "the end of the forecast horizon for 14 days appears colder once again, likely supporting the price development today."
The recent cold weather has also led to a greater volume of storages being drained, they said.
Gas Infrastructure Europe's latest data shows that EU gas storage sites were only 54.88% full, as opposed to 66.9% last year.
"The weather will be milder for the next 10 days, but it could get cold again in the last week of January," LSEG's Georg Mueller. Dzmitry Dzmitry Dauhalevich, LSEG analyst, said that the increased?geopolitical tensions following reports that the United States was considering military and cyber options to combat Iran have raised the potential for?potential disruptions in LNG supply chains.
Europe has become increasingly dependent on LNG traded globally following the loss most of Russian gas pipeline supply.
Gasunie, the Dutch operator of a gas system, said that last year for the first time LNG imports exceeded supplies from pipelines, including those coming from Norway. LNG imports increased by?25.3% or 4.2 billion cubic meters (bcm) year-on-year.
The benchmark contract on the European carbon markets increased by 0.09 euros to 89.65 euro per metric ton. (Reporting and additional reporting by Alban Kcher; editing by Nina Chestney.)
(source: Reuters)
