EUROPE GAS: Prices firm on LNG storage and concerns

The prices of Dutch and British gas contracts were mostly firmer on Friday. This was due to low storage levels and the cold weather that has been continuing. Also, there are concerns about Iran and its geopolitical implications for liquefied gas shipments.

LSEG data show that the January contract?at TTF hub?was up 0.48 euros at 40.45 'euros?per MWh on its last trading day, or $14.12/mmBtu by 0947 GMT.

However, the main focus is now on the March contract which has gained 0.47 euros to 38.85 Euro/MWh.

The Dutch day-ahead contracts was down by 0.06 euros at 40.35 Euro/MWh.

The British gas day-ahead price rose by 1.57 pence, to 103.57 p/therm. Meanwhile, the gas contract for February increased by?3.20 pences to 104p/therm. And March's gas contract gained 1.70 pences to 95.20p/therm.

Analysts said that the evolution of gas storage during ongoing cold weather is a major market concern.

Data from Gas Infrastructure Europe showed that EU gas storage facilities were 42.9% filled at the end of last year, down from 55% the same time last. This is below the average five-year level of 58%.

Arne Lohmann, Global Risk Management's chief analyst, wrote that the situation was becoming more serious with another cold spell predicted for the second week in February.

Wayne Bryan, LSEG analyst, said that geopolitical risks have also returned in response to possible US actions in Iran.

While prices haven't yet reacted, events such as the US strikes against Iran in June last year show that any escalation can threaten LNG supply and raise prices," he said.

ING analysts say that Qatar, the second largest LNG exporter in the world, will ship volumes through the Strait of Hormuz. This could put the supply of LNG at risk.

As a result of the cold weather, some Australian LNG cargoes have been diverted from their usual destinations in Asia to the U.S.

In an effort to lower energy costs and increase reliability, the Industrial Energy Consumers of America lobby group has called for a suspension of spot LNG exports.

The benchmark contract on the European carbon markets was down by 0.96 euros at 83.02 euro per metric ton. (Reporting by Nora Buli; Editing by Krishna Chandra Eluri)

(source: Reuters)