The EU has approved a Russian LNG ban, which will increase the price of gas in Europe.
Dutch and British gas rates rose on Thursday, after the EU adopted a 19th set of sanctions against Russia. This included a ban on Russian gas liquefied imports. The United States also imposed sanctions against Russia's major oil companies.
LSEG data shows that the benchmark Dutch front-month contract was 32.68 euros per Megawatt Hour (MWh) or $11.11/mmBtu at 0950 GMT. This is an increase of 0.47 euros.
The Dutch day-ahead contracts was up by 1.00 euro at 32.75 Euro/MWh.
The British gas front-month price increased by 2.70 pence, to 82.20 p/therm. Meanwhile, the day-ahead contract rose by 2.50 pence, to 79.00 p/therm.
The EU LNG ban will be implemented in two phases. The EU's LNG ban will be implemented in two stages. The ban is a full year earlier than planned by the European Commission to reduce the EU's dependence on Russian fossil fuels.
Gas prices are up by 20 percent from their lows of October 17th. In a morning report, Northern Gas and Power, an independent consultancy, stated that if the bullish movement in U.S. Gas continues, LNG prices may rise, increasing the cost of supplies through winter.
"Any disruption in LNG supply from 2027 due to Russian sanctions, or reduced U.S. supply and Qatari gas could support European prices as countries search for alternative, possibly more expensive suppliers." The report stated that this would lead to higher costs for filling European storage, and possibly import costs for the UK in order to compete on a more costly European market.
Dzmitry Dzmitalevich, LSEG analyst, says that in Northwest Europe temperatures will fall by 2 degrees Celsius the next day, causing residential heating demand to increase by 483 gigawatt-hours per day, to 2173 GWh/d.
He added, "With the rest fundamental picture staying unchanged and the technicals not showing significant bullish movement, our outlook for TTF in the days ahead is sideways to positive."
LSEG data revealed that Norwegian gas flow is down by 6 million cubic metres per day, primarily due to a field outage in Oseberg.
Gas Infrastructure Europe's data shows that EU gas storage sites are still at levels similar to those seen previously, at under 83%. However, they are behind last year at this time, when levels were just over 95%.
The benchmark carbon contract in Europe was down by 0.23 euros at 79.35 euro per metric ton. (Reporting and editing by Joe Bavier; Marwa Rashad)
(source: Reuters)
