EUROPE GAS-Prices firm on Norwegian field outage, Russian supply worries

British and Dutch gas prices firmed on Friday morning amid a drop in Norwegian supplies, lower Russian gas flows to Europe and persistent wider concerns about gas supplies in the event of sanctions if Russia invades Ukraine.

The Dutch day-ahead contract TRNLTTFD1 was up by 1.60 euros at 93.30 euros per megawatt hours (MWh) by 1037 GMT, while the February contract TRNLTTFMc1 was 1.65 euros higher at 92.55 euros/MWh.

In the UK, the March contract TRGBNBPMH2 was up by 6 pence at 223 pence per therm and the day-ahead contract TRGBNBPD1 rose 5.25 pence to 220 pence/therm.

Analysts at Refinitiv said curbed exports from Norway and weaker sendout of liquefied natural gas would remain bullish market drivers of the day-ahead market.

Total Norwegian exports have dropped due to an unplanned outage at the Troll gas field, cutting supply by 36 million cubic metres (mcm) per day.

Higher reverse flows on the Yamal-Europe pipeline from Germany into Poland and lower Russian gas flows via Ukraine might also support prices, Refinitiv said.

Meanwhile, the market continues to price in the effects of a potential war between Russia and the Ukraine, which could result in new sanctions against Russia from the EU and a potential cancellation of the Nord Stream 2 project, analysts at Energi Danmark said in a note.

“Nothing suggests that the market could not climb even higher today,” they added.

Bearish risk stemmed from a relatively warmer weather outlook for next week that could weigh on prompt contracts, Refinitiv gas analysts said.

“The next 10 days are seen similar among the models with rather unsettled, windy and mild conditions prevailing in both the UK and continental Europe,” Refinitiv meteorologist Georg Mueller said.

Higher wind output will reduce gas-for-power demand in both Britain and Europe next week, Refinitiv data showed.

In the European carbon market, the benchmark 2022 price CFI2Zc1 inched down by 0.11 euro to 89.65 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo, Editing by Susanna Twidale)