Dutch and British wholesale gas prices retreated on Thursday from a two-month intraday high the previous day after concerns faded over tight liquefied natural gas (LNG) supply due to possible strikes at Australian facilities.
The news of possible strikes at Chevron CVX.N and Woodside Energy Group WDS.AX Australian LNG facilities, which together supply about 10% of the global LNG market, sparked concerns over cargoes moving to Asia, but both companies said on Thursday they are holding talks with unions to avert strikes at the facilities.
The front-month Dutch contract TRNLTTFMc1 fell by 4.50 euros to 37.30 euros per megawatt hour (MWh) by 0912 GMT, Refinitiv data showed. The contract hit its highest level since June 15 on Wednesday, touching 42 euros/MWh.
The Dutch October TRNLTTFMc2 contract fell by 2.55 euros to 39.90 euros/MWh.
“After the talks about the deal with the unions, we don’t need to be above 40 (euros) anymore. We’re quite well positioned with storage, so no need to panic yet on LNG,” a European gas trader said.
Refinitiv analyst Tomasz Marcin Kowalski said that although Europe does not import Australian LNG, the event raised concerns about the security of European energy, which has become more reliant on LNG imports since the sabotage of the Nord Stream 1 and 2 gas pipelines last summer.
“Australia’s LNG exports go mainly to Asia… where there is high seasonal cooling demand, likely resulting in increased competition for LNG cargoes between European and Asian markets,” he said.
Despite record high Northwest Europe stock levels at 88% full, any supply disruptions could cause volatility in the European market, showing that the energy crisis is not over yet, he added.
In Britain, the day-ahead price TRGBNBPD1 fell by 12.00 pence to 88.00 pence per therm, while the contract for immediate delivery TRGBNBPWKD was down 6.00 pence at 87.00 p/therm.
Wind power is expected to rise in Britain but gas prices in the UK market were buoyed by a lack of LNG deliveries, with no cargoes currently scheduled.
Peak wind power generation in Britain is forecast at 7.8 gigawatts (GW) on Thursday, rising to 9.4 GW on Friday, Elexon data showed.
In the European carbon market, the benchmark contract CFI2Zc1 inched up by 0.48 euro to 83.47 euros a tonne.
Source: Reuters (Reporting by Marwa Rashad, Editing by Nina Chestney)