Dutch and British wholesale gas prices were a little firmer on Tuesday morning as weaker demand was offset by ongoing fighting in Ukraine and curtailed supply from Norway and U.S. liquefied natural gas (LNG).
The benchmark Dutch front-month contract at the TTF hub (TRNLTTFMc1) was up 0.48 euro at 35.45 euros per megawatt hour (MWh) or $11.86/mmBtu, by 0836 GMT, LSEG data showed.
The British front-month contract (TRGBNBPMc1) rose by 1.63 pence to 83.20 pence per therm, while the day-ahead contract (TRGBNBPD1) was up 1.50 pence at 83.00 p/therm.
Prices opened little changed after gains on Monday from a perceived rise in geopolitical tensions after Ukraine launched a large-scale drone attack on air bases deep inside Russian territory, analysts at Engie EnergyScan said.
“The market clearly fears this means a ceasefire and potential peace agreement have moved further away,” Karsten Sander Nielsen, senior market analyst at Mind Energy said in a morning note.
There was no breakthrough on a proposed ceasefire during a latest round of talks between Russia and Ukraine in Turkey on Monday and both sides reported attacks on energy infrastructure on Tuesday.
Total Norwegian export nominations stood at 297 million cubic metres/day (mcm/d), compared with 291 mcm/day on Monday, data from infrastructure operator Gassco showed.
However, maintenance outages will increase again from Thursday, limiting the downside for prices, LSEG analyst Ulrich Weber said.
While short-term gas demand in continental Europe remains weak due to mild temperatures and strong power generation from renewable sources and nuclear, lower wind speeds in Britain should lift gas-for-power demand there, he added.
“Wind power generation spikes today but remains above normal for the remainder of this week and most of the forecast (period),” said LSEG gas analyst Ulrich Weber said.
Europe remained the key destination for U.S. liquefied natural gas exports in May, although total volumes fell due to plant outages and maintenance at the country’s largest export facility.
In the European carbon market, the benchmark contract (CFI2Zc1) was up 0.74 euro at 71.65 euros a metric ton.
Source: Reuters