The European market is seeking clarity about Qatari LNG supplies, which has led to a reduction in prices.
The Dutch and British gas price were lower on Wednesday, after rising earlier in the week. However, they could still be volatile, as traders try to gauge how long Qatari LNG supply will remain interrupted.
Data from Intercontinental Exchange (ICE), showed that the benchmark 'Dutch front month contract' at the TTF hub had fallen by 1.02 euros to?53.27 per megawatt-hour (MWh) as of 1018 GMT.
The price of electricity rose to a record high of 65.79 euro/MWh on Tuesday, the highest since January 2023. However, it fell again by 10 euros by the end the day.
ICE data shows that the British April contract is down 3.92 pence to 137.07 per?therm.
The U.S. and Israeli war on Iran, and the retaliatory strikes?across Middle East have jolted the gas market. They have stopped Qatari LNG shipping and production through the Strait of Hormuz. Donald Trump, president of the United States, said that if needed, the U.S. Navy would begin escorting oil tankers through Strait of Hormuz. However, analysts doubted whether this could really revive 'energy transports which have ground to a stop.
Arne Lohmann-Rasmussen is the chief analyst of Global Risk Management.
According to Ross Wyeno of S&P Global Energy, the head of LNG short term analysis, outbound LNG volumes will account for approximately 17% of global LNG supply by 2026. This is roughly 337 millions cubic meters per day.
He added: "We estimate that approximately 170 mcm/day of these volumes will be delivered to purchasers who will need to source replacement cargoes immediately from global spot markets or long-term contracts."
Wyeno's comparison shows that this is about 30% of the expected European imports for 2026. The European Union has told its members that it does not expect any immediate impact from the conflict in Iran to the security of the natural gas supply, and currently is not planning response measures on a national or EU level. The Russian-flagged LNG tanker Arctic Metagaz caught fire in the Mediterranean. It was sanctioned by both the United States of America and Britain.
Gas Infrastructure Europe's data shows that EU gas storage sites were last 29.9% filled, and depletion has slowed due to milder weather.
The benchmark contract on the European carbon markets was down by 1.13 euros, at 72.20 euro per metric ton. (Reporting and editing by Nina Chestney; Nora Buli)
(source: Reuters)
