EUROPE GAS - European benchmark reaches 14-week high due to cold weather and LNG risk
The benchmark European gas contract reached a new 14-week high Thursday morning. Cold weather is expected to continue through the end of the month, which will increase demand and deplete storage sites. However, concerns remain over the supply of liquefied gas (LNG).
LSEG data revealed that the benchmark Dutch front-month contract was 32.79 euros or $11.18/mmBtu at 0856 GMT. This is an increase of 0.72 euros.
Early in the session, the contract reached its highest intraday price of 33.04 Euros/MWh since October 8.
The British gas day-ahead price increased by 3.50 pence to 89?pence a therm.
"Cold temperatures, and declining storage levels are the main drivers of concern. Mind Energy analysts stated in a daily report that the outlook for the week ahead is getting colder.
Georg Mueller, a LSEG weather expert, says that the next two weeks are expected to be mainly?dry? and progressively colder.
Dzmitry Dzmitry, LSEG analyst, says that colder weather is expected to increase demand for LNG and the need to import it. Meanwhile tensions in Iran could pose a risk to supply. The LNG exports from the U.S. - the world's largest exporter - fell to a 2-month low after the outages at the Freeport and Corpus Christi facilities in Texas.
Gas Infrastructure Europe's data shows that EU gas storage sites are currently?52.49 percent full. This is four percentage points higher than levels in 2022 when the storage levels were emptied by about 25 per cent at the end of winter.
Engie EnergyScan analysts attributed the recent rise in prices to the'stop-loss purchases' of some investment funds that hold short positions on the Dutch gas markets.
The benchmark carbon contract in Europe was trading at its highest level for 30 months, up 1.09 euro at 92.91 euro per metric ton. Nora Buli, reporting from Oslo and David Goodman editing the article)
(source: Reuters)
