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Europe Gas: Prices steady amid high gas stores, ample supply

Dutch and British wholesale gas prices were little changed on Thursday morning as high gas stores and ample supply offset geopolitical concerns.

The benchmark front-month contract at the Dutch TTF hub was up 0.34 euro at 30.33 euros per megawatt hour (MWh) by 0807 GMT, while the July contract was up 0.24 euro at 30.00 euro/MWh according to LSEG data.

In the British market, the day-ahead contract rose by 0.55 pence to 72.00 pence/therm.

“The market seems to have decided not to choose a direction for the moment, torn between comfortable spot fundamentals and several risk factors,” analysts at Engie EnergyScan said.

“In particular, after recent Russian strikes caused significant damage to Ukrainian energy infrastructure… we can understand that the market is a little worried,” they said.

Russian missile and drone attacks on Ukraine’s energy sector have intensified since March, causing significant damage and blackouts in many regions.

Concerns over possible disruptions to gas supply also increased after Ukraine warned of a Russian force buildup in the north near its Sumy region in the vicinity of the Russian town of Sudzha from where Russian natural gas transits into Ukraine by pipe on its way to European customers.

Flows, however, have remained stable. Russia’s Gazprom said that it would send 42.4 million cubic metres of gas to Europe via Ukraine on Thursday, a volume broadly in line with recent days.

High gas stocks are also helping keep prices muted.

“EU gas stocks look healthy at two-thirds full. At the current injection rate, it would reach the mandated levels of at least 90% long before the November deadline,” analysts at Auxilione said.

Europe’s gas stores are currently 65.8 full according to latest Gas Infrastructure Europe data.

In the European carbon market, the benchmark contract CFI2Zc1 was 0.25 euro higher at 69.71 euros per metric ton.
Source: Reuters (Reporting By Susanna Twidale; Editing by Sohini Goswami)

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