EUROPE GAS - Prices hold firm on the elusive Ukraine ceasefire and muted supply
The Dutch and British wholesale prices for gas were slightly higher on Tuesday morning, as a weaker demand was countered by the ongoing conflict in Ukraine. Also, there was a reduced supply of liquefied gas from Norway and the United States.
LSEG data shows that the benchmark Dutch front-month contract was 35.45 euros per Megawatt Hour (MWh), or $11.86/mmBtu at 0836 GMT. This is an increase of 0.48 Euro.
The British day-ahead contract increased by 1.50 pence, to 83.00 pence per thermo.
Analysts at Engie EnergyScan say that prices opened with little change after Monday's gains from perceived increases in geopolitical stress after Ukraine launched an extensive drone attack against air bases deep within Russian territory.
In a morning report, Karsten Sander-Nielsen, senior analyst at Mind Energy stated that the market fears this because it means a potential ceasefire agreement and a possible peace has moved further away.
The latest round of talks in Turkey between Russia and Ukraine on Monday did not yield any breakthroughs on the proposed ceasefire. Both sides also reported Tuesday attacks on energy infrastructure.
Gassco data showed that the total Norwegian export nominated was 297 million cubic meters/day (mcm/d), up from 291 mcm/day Monday.
Ulrich Weber, LSEG's analyst, said that maintenance outages would increase from Thursday onwards, limiting any price decline.
He said that while short-term gas consumption in Europe is low due to the mild temperatures, and the strong electricity generation from nuclear and renewable energy sources, the lower wind speeds in Britain will likely increase gas for power demand.
Ulrich Weber, LSEG's gas analyst, said that "wind power generation spiked today but will remain above normal throughout this week and for most of the forecast period."
The United States' largest export facility, the liquefied Natural Gas Export Facility (LNGE), was unable to produce as much gas in May due to maintenance and plant shutdowns.
The benchmark contract on the European carbon markets was up 0.74 euros at 71.65 euro per metric ton. Nora Buli, reporting from Oslo; Nina Chestney, editing)
(source: Reuters)
