Prices for EUROPE GAS rise due to concerns about LNG supply and oil strength

LONDON, 12th March - British and Dutch gas wholesale prices rose Thursday morning, as reports of tanker attacks raised fears of a prolonged disruption of regional liquefied gas supplies from the region. Meanwhile, higher oil prices added further support.

ICE data shows that the benchmark Dutch front-month contract was 52.40 euros per Megawatt Hour (MWh), or about $17.73/mmBtu at 0848 GMT. This is an increase of 2.41 euros.

According to ICE data, the British front-month contract rose 5.86 pence and now stands at 133.12 cents per therm.

Around 20% of all LNG transits the Strait?of Hormuz, but since the?U.S. Israel and the United States began their strikes against Iran on February 28, 2009.

Qatar, the world's largest producer of liquefied gas, declared force majeure and tightened supplies.

Analysts at Rabobank stated that "Europe and Asia are both highly exposed to LNG logistic, with Qatar being unable to load its cargoes due to force majeure. The global LNG balance is now tighter."

Gas Infrastructure Europe reported that Europe's gas storage tanks are 29.3% full. Gas prices are rising, which will increase the cost of restocking.

Analysts at 'Mind Energy' said that "European storage is well below the seasonal average, and hopes of filling them up during shoulder season (summer), appear to be fading as the market rose further this morning."

The oil price soared to more than $100 per barrel on Thursday, as Iran intensified its attacks on oil and transportation?facilities in the Middle East. Meanwhile, the proposal made by the International Energy Agency on Wednesday for a record release of 400 million barrels was not able to calm the market.

Because many LNG and pipeline gas contracts are index-linked with oil prices, high?oil price is bullish for gas.

The benchmark contract on the European carbon markets rose 0.43 euros to 72.29 euro per metric ton. (Reporting by Susanna Twidale, Editing by Diti pujara)

(source: Reuters)