Prices for gas in Europe hit a 1-week high due to tight supply and EU's Russian Gas Ban Plans
The Dutch and British wholesale prices of gas rose by more than 6% Tuesday, reaching their highest level in over a week. Unplanned outages as well as European plans to phase-out Russian gas supplies boosted sentiment.
According to LSEG, the benchmark Dutch front-month contract rose by 2.18 euros or 6.7% at 1257 GMT and reached its highest intraday value since April 28.
The British equivalent rose 4.71 pence, to 83.91 p/therm. Meanwhile, the day-ahead contract increased 4.30 pence.
The key drivers for the market were an unplanned power outage in Norway, and drafts of a roadmap by the European Commission to phase out Russian energy before 2027.
The unplanned outage of the Dvalin gas field in Norway has further reduced Norwegian supplies, on top of planned maintenance works. Nominations for Norwegian gas flow to Britain have fallen by 35 mcm/day Tuesday.
Gas demand is also on the rise due to the colder weather and weak wind power generation this week.
According to a draft document that was seen by, the European Commission is planning to propose next month a ban of new Russian gas contracts by the year's end, as well as a prohibition of imports under current contracts by 2027.
Analysts at Mind Energy (formerly known as Energi Danmark) said that the need to replenish European storage sites continues to support prices.
The EU's storage capacity is now 41% full thanks to LNG inflows. However, the rate of LNG inflows will be reduced in May and in June.
According to a research report by Barukh Abbadi, posted on eklipXResearch, U.S. feedgas nominated has also dropped 12% from Friday, or 47 mcm.
This was due to maintenance at Cameron and a drop in flow rates to U.S. LNG facilities Corpus Christi & Plaquemines.
The benchmark contract on the European carbon markets rose 1.67 euros to 69.14 euro per metric ton. Nora Buli, reporting from Oslo and Marwa Rashed in London; editing by Sonia Cheema & David Evans
(source: Reuters)
