Prices for EUROPE Gas remain firm as tensions between the U.S. and Iran continue
Dutch and British wholesale natural gas prices rose on Friday morning after a sharp increase in the previous session. This was due to tensions between Iran and the United States that could impact the shipping of LNG.
Gas market concerns are any possible disruptions of LNG shipments via the Strait of Hormuz. This is especially true for Qatar, the second largest gas supplier in the world.
In intraday trading on Thursday, the Dutch front-month contract jumped as high as 16%. Data from LSEG shows that the last time a price rose more than 27.54% in a single day was on Aug. 9, 2023, due to fears of 'Australian LNG strikers.
The price rise was less steep on Friday morning, but the geopolitical drivers remained.
LSEG data shows that the Dutch contract for March is up 0.54 euros at?33.40 per megawatt-hour (MWh) as of 0851 GMT.
The?Q2 contract increased by?3.11 euro to 31.49 Euro/MWh.
The EU's gas stocks are lower than normal because of the Middle East crisis. Analysts at ING said that EU gas storage was less than 32% filled at the moment. This is well below the 5-year average of 48.9%.
Donald Trump, the U.S. president, warned Iran last night that it must reach a nuclear deal with its neighbor or "really bad" things will happen. He set a 10-to-15-day deadline, which prompted Tehran to threaten to retaliate if they were attacked.
LSEG data showed that, in terms of?market fundamentals?, temperatures are expected to be milder up until mid-March. The supply is mostly stable.
The?day-ahead' price in the British market was 2.40 pence higher at 82.05 cents per therm.
The benchmark contract on the European carbon markets was up by 0.23 euros at 71.57 euro per metric ton.
(source: Reuters)
