Dutch and British wholesale gas prices fell sharply on Thursday after a preliminary deal between unions and Woodside Energy WDS.AX that is set to avert a potential strike at Australia’s largest liquefied natural gas (LNG) facility.
The benchmark Dutch September contract TRNLTTFMc1 was down 4.20 euro at 32.30 euros per megawatt hour (MWh) by 0807 GMT, after earlier trading at 29.80 euros/MWh, its lowest since Aug. 8, according to Refinitiv Eikon data.
The corresponding British contract TRGBNBPMU3 fell by 11.50 pence to 80.00 pence per therm.
Overnight, Woodside Energy and unions reached an in-principle agreement with workers on its North West Shelf facility, with union members voting to ratify the deal at 7.30 pm Perth time (1130 GMT).
They had threatened to strike as early as Sept. 2 over a wages and work conditions dispute, sending European prices higher on fears of increased competition for LNG with Australia’s key buyers in Asia.
The Woodside news had removed a major risk premium in the curve, a trader said.
“I think we might have oversold it a bit,” he added.
Separately, workers at Chevron’s Australian LNG facilities are still considering industrial action, although local media reports suggest the company would look to circumvent unions by tabling a pay offer directly to workers in the coming days.
Were strikes at Chevron averted as well, the TTF could ease further to around 28 euros/MWh, the trader said.
European gas storages are 91.6% full, according to Gas Infrastructure Europe data.
Further in, the Dutch day-ahead contract TRNLTTFD1 was down 4.95 euros at 31.55 euros/MWh.
In Britain, the day-ahead price TRGBNBPD1 fell by 11 pence to 81.00 pence per therm, while the within-day price TRGBNBPWKD dropped 12 pence to 80.00 p/therm.
Gas-for-power demand in Britain is forecast to fall by 5 million cubic metres (mcm) for Friday while gas demand in north-west Europe will ease by 60 gigawatt hours/hour, according to Refinitiv Eikon data.
A drop in Norwegian supply amid heavy maintenance has already been priced in, Refinitiv analyst Yuriy Onyshkiv said in a morning note.
In the European carbon market, the benchmark contract CFI2Zc1 fell by 2.00 euros to 86.22 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by David Evans)