Gas prices in Europe are soaring as Norwegian production increases

Early on Wednesday, Dutch and British wholesale prices for gas moved within a small range as the market anticipated an increase in Norwegian production in order to meet the increased demand for heating.

LSEG data shows that the benchmark Dutch front-month contract was 32.03 euros or $11.05 per megawatt hour at the TTF Hub at 0915 GMT. This is a decrease of 0.22 euros.

The British gas front-month price fell by 0.52 pence, to 80.01 cents per therm.

The British day-ahead contracts was down 0.30p at 79.70p/therm.

LSEG data revealed that the local distribution zone demand in Northwest Europe, which is the residential heating demand, is expected to increase by 1 million cubic meters per a day, to 84 mcm/d, for the day ahead, due to the forecasted fall of temperatures over the next fifteen days.

In a morning report, Tony Jordan, Director of Consultancy, Auxilione said that Norwegian flows were struggling to return to full speed, and unplanned maintenance was ongoing at certain assets. This is a cause for concern, but should be resolved in the next few days.

Karsto's gas processing plant is scheduled to undergo planned maintenance on Wednesday. LSEG data shows that the Langeled pipeline increased its production by 2 mcm/d up to 75 mcm/d. The production of Vesterled pipeline also increased by 11 mcm/d.

There is high impact maintenance on several fields delivering Karsto. "We expect a 40mcm/d rise in the total Norwegian flow on Thursday and another 3mcm/d on Friday," said LSEG's Saku Jussila.

Gas Infrastructure Europe has released the latest figures showing that Europe's gas storage tanks are 81.96% filled.

The benchmark contract on the European carbon markets was down by 0.03 euros at 76.12 euro per metric ton. (Reporting by Marwa Rashed; Editing By Barbara Lewis)

(source: Reuters)