Gas prices in Europe reach 10-week high amid Iran tensions
Early trade on Europe's benchmark contract for gas reached a 10-week-high, continuing the bullish trend from?the last session amid forecasts of increased demand, short covering and geopolitical tensions regarding Iran.
According to LSEG, the benchmark Dutch front-month 'contract' at the TTF hub increased by 0.80 euros to 31.27 Euro per Megawatt Hour (MWh) as of 0905 GMT.
Earlier trades reached a contract price of 32.23 Euros, its highest since November 4, last year.
The March contract was up 0.88 euros at 30.43 euro/MWh.
The British gas day-ahead price rose 4.20 pence to 84.00 pence a therm.
The temperatures in North-West Europe are expected to remain the same until the weekend, and then drop. This could increase heating demand next week.
The wind generation is expected to remain steady until the weekend, and then fall after. A decrease in wind output usually increases the demand for gas generated by power plants.
LSEG data shows that the North-West Europe LNG send-out will also fall by 97 gigawatt-hours per day (GWh/d), to 2,199 GWh/d, from yesterday.
The risk of LNG supply chain disruption has also increased due to geopolitical tensions surrounding Iran.
First, there are risks associated with LNG flows from the Persian Gulf. Analysts at ING said that there is a possibility of disruptions in Iranian gas shipments to Turkey.
They added that "given the large TTF short, it wouldn't?take?much? to move the markets as funds flow?into cover shorts."
Donald Trump, the U.S. president, said on Monday that any country?that does trade with Iran would face a 25% tariff rate for any trade with America.
The benchmark contract on the European carbon markets was up by 0.86 euros at 90.96 euro per metric ton. Nina Chestney reports.
(source: Reuters)
