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EUROPE GAS-Dutch prices ease in quiet trading

Dutch wholesale gas prices mostly eased on Friday morning amid a comfortable supply situation and as activity remains low with a long bank holiday weekend in Britain, where markets are closed.

In the Dutch market, the July TTF contract was down 0.20 euros at 83.75 euros per megawatt hours (MWh) by 0853 GMT, with the contract for winter 2022 trading down 2.03 euros at 93.52 euros/MWh, according to trades on the Intercontinental Exchange (ICE).

The July contract is trading close to its 1-year average of just above 82 euros/MWh, which was still providing support, analysts at Engie EnergyScan said in a note.

“But, with weaker gas demand from power generators, with (Asian) JKM prices at lower levels, and now the restart of Norway LNG exports, if Russian flows are not cut further, the 1-year average support could be broken in the coming days,” they said.

Norway’s Hammerfest liquefied natural gas plant has restarted LNG production following a fire almost two years ago, operator Equinor EQNR.OL said on Thursday.

Russian gas flows to Europe dropped marginally on Friday morning in line with customer requests, after an initial drop earlier in the week in the wake of gas supplies being cut to some companies, operator data showed.

Meanwhile, seasonally lower energy demand, more wind and rising gas and coal inventories have been weighing on energy markets in recent weeks, which remain torn between softer prompt fundamentals and the outlook for tighter markets in the longer run, analyst Andy Sommer at Swiss energy trader Axpo said in a monthly note.

Gas storage facilities in the EU are now 47.6% full and close to their 5-year average levels, data from Gas Infrastructure Europe showed.

Still, “the risk of supply crunches in Europe – due to the Ukraine war or a strong return of Asian consumers to the global commodity markets – remains high,” Sommer said, expecting energy markets to remain “very nervous”.

In the European carbon market, the benchmark contract CFI2Zc1 rose by 0.29 euros to 86.63 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Robert Birsel)

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