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Europe Gas” Prices head lower for second day in correction move

European and British wholesale gas prices shed gains on Friday for the second day in a row in correction to the spike it saw earlier this week on Russian supply concerns.

The British within-day gas contract was down 3.55 pence at 2.109 pounds per therm by 1003 GMT.

The Dutch day-ahead gas contract was down 0.89 euros at 89.75 euros per megawatt hour.

The benchmark Dutch front-month contractwas down 3.45 euros to 89.05 euros per megawatt hour.

“The reaction to this week’s Nord Stream 2 news was probably a bit overdone and the market is retracting from that this morning,” said Tamir Druz, managing director at Capra Energy Group.

Market sentiment is also bearish because of the arrivals of LNG cargoes into Europe this month, a gas trader said.

“Our forecast indicates an 18 million cubic metres (mcm)/d increase in UK LNG send-out with seven cargo arrivals confirmed to UK terminals by early December and 14mcm/d higher combined IUK and BBL net imports from the Continent next week,” Refinitiv analysts said.

Gas prices rose earlier this week after Germany’s energy regulator suspended the approval process for Nord Stream 2, a major new pipeline built to bring Russian gas into Europe.

Russian natural gas flows through the Yamal-Europe pipeline to Germany have been steady for the past 24 hours on Friday, data from German network operator Gascade showed.

Traders are also watching COVID-lockdown returns across Europe for any potential impact on demand.

From a fundamental perspective, the UK system was 14.8 mcm oversupplied on Friday, National Grid data showed.

In other markets the benchmark Dec-21 EU carbon contract CFI2Zc1 was down 0.17 euros at 69.03 euros/tonne.
Source: Reuters (Reporting by Marwa Rashad; Editing by Susanna Twidale)

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