EUROPE GAS - European gas prices rise on Middle East conflict
Prices for'standard' Dutch and British wholesale gas increased on Monday, after a flurry of energy shipments were suspended through the Strait of Hormuz due to the intensified attacks by Israel and Iran in the Middle East. Trade sources say that most tanker owners, oil companies and trading houses have stopped shipping crude oil, fuel, and LNG through the Strait of Hormuz after Tehran warned against it.
Europe has increased its LNG imports in the last few years to replace Russian gas after Russia's invasion.
Around 20% of the world’s LNG transits the Strait of Hormuz. A prolonged suspension or complete closure would increase global competition and drive up international prices.
Massimo Di Odoardo is vice president of gas and LNG research for Wood Mackenzie. He said that disruptions to LNG flows could reignite competition between Asia and Europe over available cargoes. The Dutch front-month at the TTF Hub, seen as a reference price for Europe, rose 7.44 euros to 39.40 euros per Megawatt Hour (MWh), which is around $13.54 /mmBtu by 1131 GMT.
Platts data revealed that the benchmark Asian LNG price jumped by almost 39% Monday morning. The S&P Global Energy Japan Korea-Marker (JKM), which is widely used as a benchmark for Asian LNG, was $15.068 per mmBtu.
Warren Patterson, ING's head of commodities strategy, stated that "if LNG/gas markets begin to 'price in' an extended period of Qatari LNG supply losses, TTF may spike up to 80-100 euro/MWh (28-35/mmBtu)." ICE data shows that the British April contract is up 21.49 pence, or 100.60 pence/therm.
Gas Infrastructure Europe's latest data shows that Europe also relies on LNG imports in order to fill its gas storage facilities, which were?emptied over the winter. They are now?about 30% full.
The benchmark contract on the European carbon markets was down by 0.49 euros at 69.80 euro per metric ton. (Reporting by Susanna Twidale, editing by Nina Chestney).
(source: Reuters)
