Prices of EUROPE GAS fall amid tentative market expectations for an end to the Iran war
Dutch and British benchmark gas prices fell early on Wednesday to their lowest level in nearly two weeks, following news of the U.S. initiative to negotiate an end to the war with Iran which has stopped around a fifth?of global oil and natural gas supplies.
Intercontinental Exchange data showed that the benchmark Dutch front-month contract for the TTF hub had fallen by 4,44 euros to 49,60 euros per megawatt at 0855 GMT.
The price of electricity briefly fell to 48.75 Euros/MWh (its lowest level since March 13).
After hitting an intraday minimum of 123.00p/therm, the British contract for April dropped by 11.04 cents to 125.31p/therm.
TRUMP SAYS US MAKING PROGRESS U.S. president Donald?Trump stated on Tuesday that the U.S. is making progress in negotiations to end the war with Iran. A source confirmed that Washington sent Iran a settlement proposal of 15 points. Iran claimed that there had been no direct or indirect communication with the U.S., but it hoped to open a dialog via "friendly" countries.
Analysts at SEB said that the market had reacted positively to the uncertain prospects for peace.
The Gulf conflict has almost completely halted the export of oil and gas liquefied.
Analysts at ING said that while a ceasefire could ease immediate risks for global energy trade markets, they remain prepared for prolonged supply disruptions. However, prices have dropped due to profit-taking after Trump's remarks.
The market participants continue to monitor developments in the Strait of Hormuz after?reports indicating that Iran had begun charging transit fees for some commercial vessels. COSCO SHIPPING Lines, based in Shanghai, said Wednesday, via a client note, that it has resumed bookings for general cargo containers to be shipped to Bahrain, Iraq Kuwait, Qatar Saudi Arabia, and the United Arab Emirates. Analysts at ING said that a rapid recovery in LNG flows is unlikely. QatarEnergy announced that it would have to declare force majeure for several contracts following Iranian attacks which damaged approximately 17% of its LNG production capacity. Dzmitry Dzmitry Dauhalevich, LSEG analyst, predicted that the gas demand for northwestern 'Europe will increase by 800 gigawatt-hours per day GWh/ due to colder temperatures.
He added that the LNG exports will also be gradually declining into April.
Last week, EU gas storage sites were 28.4% filled. They had barely moved in the past week. Gas Infrastructure Europe's data shows that they are around five percentage points behind where they were at the same point last year.
The benchmark contract on the European carbon markets was up by 1.33 euros, at 72.55 euro per metric ton. (Reporting and editing by Barbara Lewis; Nora Buli)
(source: Reuters)
