British and Dutch gas prices rose on Wednesday amid fears of a fresh hit to global financial and energy markets after Russia announced it is stepping up military mobilisation in its war in Ukraine.
The Dutch front-month contract TRNLTTFMc1, the European benchmark, was up 14.00 euros at 210.00 euros per megawatt hour (MWh) at 0900 GMT.
The British equivalent contract TRGBNBPMV2 gained 15.90 pence to 330.00 pence per therm.
President Vladimir Putin on Wednesday ordered Russia’s first mobilisation since World War Two, warning the West that if it continued what he called its “nuclear blackmail”, Moscow would respond with the might of all its vast arsenal.
“With the view that the announced mobilisation, and thus escalation of the war, should bring more risks for financial and energy complex, we take a bullish view for prices today,” analysts at Refinitiv said in their morning note.
Putin’s announcement overshadowed othermarket news such as Germany’s nationalisation of utility Uniper UN01.DE, or Britain’s plans to cap energy bills for businesses, consultancy Auxilione said in a market update.
Meanwhile, a tropical storm building up in the Gulf of Mexico might impact U.S. export terminals for liquefied natural gas (LNG), which have accounted for around 40% of total European LNG imports this year, analysts at Engie EnergyScan said.
“Short-term fundamentals remain largely unchanged, with below-average temperatures expected to last until the end of September offset by rising wind speeds and growing supply from Norway and LNG terminals,” they added in a note.
A raft of LNG tankers are currently expected to arrive at terminal in Britain and north-western Europe.
In the UK, temperatures will fall below normal next week from slightly milder than normal weather at present, increasing gas demand for heating, Refinitiv said.
The British day-ahead contract TRGBNBPD1 rose by 15.00 pence to 270.00 p/therm, and the within-day contract TRGBNBPWKD was up 18.00 pence at 265.00 p/therm.
Prices gained despite the UK system being 6.8 million cubic metres (mcm) per day oversupplied, according to National Grid data.
In the European carbon market, the benchmark contract CFI2Zc1 was down 0.22 euros at 70.92 euros a tonne.
Source: Reuters (Reporting by Nora Buli in OSLO; editing by Nina Chestney)