British and Dutch wholesale gas prices were mostly lower on Friday as market players took profits from recent rises and adopted a wait and see approach on concerns over Russian gas supplies to Europe after Russian imposed sanctions on some energy companies.
In the British gas market, the contract for immediate delivery fell by 30.00 pence to 30.00 pence per therm by 0859 GMT while the contract for weekend delivery fell by 5.00 pence to 45.00 pence per therm.
In the Dutch gas market, the contract for next day delivery fell by 0.50 euros to 93.00 euros per megawatt/hour (MWh) and the contract for June delivery fell by 2.75 euros to 102.25 euros/MWh.
“It is still a wait and see game and fear factor is taking a breather. Market players cannot do much so we take it day by day,” a European gas trader said
Daily nominations for Russian gas deliveries to Slovakia via Ukraine rose on Friday to around 946,741 megawatt hours (MWh) per day, versus 625,135 MWh per day on Thursday, data from Slovakian operator TSO Eustream showed.
Russian gas producer Gazprom said it continues shipping gas to Europe via Ukraine at the Sudzha entry point, with volumes on Friday seen at 61.97 million cubic metres (mcm), compared with 50.6 mcm on Thursday.
Flows via Yamal-Europe pipeline through Poland into Germany and to Germany through the Nord Stream 1 pipeline were almost unchanged as well from Thursday’s levels.
“They (the Russians) want to sell the gas, no way around it, but if Europe decides to turn it off they will, then its something out of our hands,” the trader said.
The market is still scrambling to work out the impact of sanctions announced late on Wednesday on Gazprom Germania, which was placed under trusteeship of the German energy regulator earlier this year.
Analysts at Engie’s EnergyScan said that if Russian flows through Ukraine remain around this level, the market could consider that the situation is manageable and avoid overbidding.
In Britain, the UK system was 10.9 million cubic metres (mcm) over supplied on Friday morning, National Grid data showed. The strong LNG flows and a warmer weather forecast were also bearish factors.
“In the absence of any breaking news or supply issues we could see prices give back some of yesterday’s gains although downside potential looks muted in light of the current fraught geopolitical landscape,” Refinitiv analysts said.
In the European carbon market, the benchmark contract CFI2Zc1 rose by 1.34 euros to 89.60 euros a tonne.
Source: Reuters (Reporting by Marwa Rashad; editing by David Evans)