EUROPE GAS-Prices rise on US-China tariffs deal
Dutch and British wholesale prices for gas rose on Monday, boosted by the news that the U.S. had reached a deal with China to reduce tariffs. This has improved the outlook of the economy.
The benchmark Dutch contract for the front month gained 1.17 euro to 35.87 Euros per Megawatt Hour (MWh), which is $11.68/mmBtu by 0828 GMT, and the contract for July was up 0.95 Euros at 35.45 EUR/MWh.
The British June contract increased by 2.61 pence, to 85.66 pence/therm. The day-ahead contract also rose 3.75 pences at 80.50 pence/therm.
The United States announced on Monday that it had reached an agreement with China for a 90 day pause in the tariff war, which has caused global economic disruption and shook financial markets. Both countries have pledged to reduce tariffs significantly.
One trader stated that the news caused gas prices to rise, despite no significant changes in supply or weather fundamentals. He added that continued macroeconomic and geopolitical uncertainties make it difficult to gauge appropriate price levels.
Engie EnergyScan analysts stated in their morning report that the price increase may be limited because TTF prices are already trading close to their technical peaks.
The news that Vladimir Putin is expected to meet Volodymyr Zelenskiy in Turkey on Thursday had only a limited impact when it was announced over the weekend.
The consultancy Auxilione stated that it was not clear if the goal of this meeting is to end the conflict or negotiate a truce, as a ceasefire has been proposed numerous times in recent weeks.
The trader stated that even if the war ended quickly, Russian gas would not be flowing back to Europe.
In talks between Russia, the United States and other countries, they are discussing this issue.
The benchmark contract on the European carbon markets was up 2.01 euros, at 72.40 euro per metric ton. Nora Buli, reporting from Oslo and David Goodman editing)
(source: Reuters)
