Home / Oil & Energy / General Energy News / EUROPE GAS-Prices fall amid robust LNG supply

EUROPE GAS-Prices fall amid robust LNG supply

British and Dutch gas prices mostly fell on Wednesday due to robust liquefied natural gas supply and slightly higher temperatures to the end of the week.

The British contract for February delivery fell by 12.90 pence to 1.29 pounds per therm by 0944 GMT, while the Dutch contract March contract slipped by 2.10 euros to 71.90 euros per megawatt hour (MWh).

The Dutch February contract inched down by 0.30 euro to 73.45 euros/MWh.

Britain is set to receive a record number of LNG cargoes this month, adding to ample supply.

The Japan-Korean Marker reference price for LNG for March also appears to be slipping.

“While there is still some spot tension in the Asian market, this situation is not expected to last, which should maintain a comfortable LNG supply for Europe,” said analysts at Engie Energyscan.

Temperatures in Britain and north-west Europe are forecast to rise above the seasonal norm by the end of the week before dropping again next week, Refinitiv Eikon data showed.

Weaker wind output towards the end of the week is also expected which could increase gas-for-power demand.

The British day-ahead price was 2.00 pence higher at 1.80 pounds per therm.

Although UK storage sites are currently 93% full, consultancy Wood Mackenzie said stock levels in Europe could drop to a record low of 15 billion cubic metres (bcm) by the end of March due to low Russian imports.

Requirements to refill storage will be around 20-25 bcm more this year even though prices could eventually come down as Spring approaches.

“Cold weather in Europe could exacerbate the situation further, adding up to 10 bcm to gas demand through the rest of the winter, pushing storage levels to zero unless more Russian gas is supplied, and Europe may have to tap into cushion gas to balance the market,” said Kateryna Filippenko, principal analyst of European gas research at Wood Mackenzie.

The Yamal-Europe pipeline, which usually sends Russian gas west into Europe, saw flows move east from Germany to Poland for the 24th day on Thursday.

In other markets, the European benchmark December 2022 emission allowance (EUA) contract CFI2Zc1 euros inched up by 0.06 euro to 80.07 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping