EUROPE GAS - European prices remain stable as traders evaluate sanctions talks and Norway outages
The European gas price was largely unchanged on Friday morning, despite the fact that a new package of sanctions from the European Commission against Russia is expected and there are still long-term gas shortages in Norway.
LSEG data shows that the benchmark Dutch front-month contract was 32.58 euros per Megawatt Hour (MWh) or $11.28/mmBtu at 0806 GMT. This is a 0.25 euro decrease.
The Dutch day-ahead contracts was down by 0.13 euros to 32.33 euros/MWh.
The British front-month contract for gas increased 0.25 pence, to 81.80 p/therm. Meanwhile, the weekend contract rose 0.25 p/therm.
An EU official told reporters late Thursday that the European Commission was discussing a proposal for a ban on Russian LNG as part of a new set of sanctions to be introduced on Friday against Moscow due to its invasion of Ukraine. The ban was originally set to begin at the end of 2027.
Daniel Hynes said that the news had a positive impact on European gas prices. Russia continues to cover more than 10% (and about half) of EU gas imports, and most of this is delivered as LNG.
However, the timing of phase-out is crucial. "With global LNG markets predicted to reach a surplus by the end of this decade, sanctions will impact prices in the short-term," he said.
Arne Lohmann Rasmussen is the chief analyst of Global Risk Management. He said that unplanned extensions to outages in Norway's Troll Gas Field and at Kollsnes Onshore Processing Plant also supported prices.
Oleh Skrynyk of LSEG, an analyst, stated that Norwegian LNG flows are recovering after a sharp drop due to planned outages before winter.
Colder weather and the drop in wind energy output were among factors that boosted gas demand. Skrynyk said that the demand from households and small industries in northwest Europe will increase by 336 gigawatt-hours (GWh) each day on Monday.
Gas Infrastructure Europe's data shows that EU gas storage sites are now at 81% capacity. This is down from a little over 93% just a year ago.
The benchmark contract on the European carbon markets was down by 0.57 euros, at 77.27 euro per metric ton. Nora Buli, reporting from Oslo. Editing by David Goodman
(source: Reuters)
