EUROPE GAS-Prices rise on concerns over Nord Stream 1, heat wave
Dutch wholesale gas prices rose in early trade on Tuesday on concerns over Nord Stream 1 flows, after Gazprom told customers in Europe it cannot guarantee gas supplies because of ‘extraordinary’ circumstances.
The benchmark Dutch front-month gas contract rose by 1.8 euros to 161 euros per megawatt hour by 0850 GMT, while day ahead contract rose by 1.7 euros to 160.20 euros/MWh.
Russia’s Gazprom said it was retroactively declaring force majeure on supplies from June 14 according to a letter seen by Reuters, adding to fears in Europe that Moscow may not restart the pipeline at the end of the maintenance period in retaliation for sanctions imposed on Russia over the war in Ukraine.
Uniper, Germany’s biggest importer of Russian gas, was among the customers that said it had received a letter, and that it had formally rejected the claim as unjustified. Also RWE, Germany’s largest power producer and another importer of Russian gas, said it has received the force majeure notice.
“This adds more uncertainty and will be a bullish factor for prices until there is more clarity on what’s next,” a gas trader in Europe said.
Extreme heat conditions in Europe added to concerns over availability of infrastructure across several countries including France and Spain.
In Britain, the extreme heat wave, with forecast record breaking temperatures, coupled with an outage at a Norwegian terminal sent prices high on Tuesday morning.
The British day-ahead contract rose by 18.5 pence to 179.50 pence per therm, while the within-day contract was up 18 pence at 183 p/therm by 0850 GMT.
An unplanned maintenance at Norways’ FLAGS exit terminal shrank Norwegian exports to the terminal by 6 to 9 million cubic meters per day (mcm/d). An official notice said the outage is due to due to high ambient temperatures at receiving facilities.
In the European carbon market, the benchmark contract fell by 0.81 euros to 84.13 euros a tonne.
Source: Reuters (Reporting by Marwa Rashad; Editing by Rashmi Aich)