The price of gas in Europe has fallen from its 11-week peak, but Middle East concerns remain dominant
The Dutch and British wholesale prices of gas largely eased Friday morning, after reaching new 11-week-highs on Thursday. However, they remain volatile due to the possibility of an escalation of the Israel-Iran dispute and possible U.S. participation.
LSEG data shows that the benchmark Dutch front-month contract for the TTF hub fell 0.23 euros to 40.05 Euro per megawatt hour by 849 GMT.
The contract rose briefly to 41.85 Euros/MWh intraday on Thursday, its highest level in since April 2.
The British front-month contracts fell by 3.51 pence, to 95.15 pence per therm. It had previously reached its highest level since April 2, at 98.66 pence per therm.
In their morning report, Engie EnergyScan analysts said that the Middle East tensions were the main reason for the price increase. The market was increasingly concerned about the US' involvement in the Israel/Iran conflict.
Official comments from President Donald Trump that he will decide if the U.S. gets involved in the Israel/Iran air war within the next two week eased fears of an immediate escalation. Oil prices also began to fall.
The possibility of a closure of the Strait of Hormuz is a major concern as it could limit supplies of LNG.
"The world is gripped by uncertainty." Engie's analyst wrote that the situation on the gas market is no different.
Auxilione, a consultancy, said in its daily market report that the market will likely remain on high alert and volatile due to President Trump's comments.
Israel resumed its limited natural gas exports after shutting two offshore fields nearly a week ago.
Dzmitry Dzmitry, LSEG analyst, said that in Europe, the gas demand sparked by a recent heatwave is expected to decrease next week as temperatures drop and there's more wind.
The Dutch day-ahead contracts eased by 1,55 euros, to 39.95 euros/MWh.
The British contract for the day ahead was up 0.75 pence, at 98.75p/therm. However, the contract for within a day was down by 1.00p/therm.
The benchmark contract on the European carbon markets was up by 0.16 euros, at 72.90 euro per metric ton. Reporting by Nora Buli, Oslo; Editing and proofreading by Saad sayeed
(source: Reuters)
