Dutch and British gas prices rose on Friday morning as forecasts for cooler temperatures lifted demand while geopolitical risks and strikes at liquefied natural gas (LNG) facilities in Australia raised supply concerns.
The Dutch November gas contract rose by 1.06 euros at 54.35 euros per megawatt hour (MWh) by 0917 GMT, according to LSEG data.
The December contract was up 1.00 euro at 56.00 euros/MWh.
In Britain the day-ahead contract rose by 10 pence to 130 p/therm, LSEG data showed.
“Panic buying due the various risk factors (risk of strike on Australian LNG plants, fears of a disruption in energy supplies due to the tensions in the Middle East, forecasts of a strong drop in temperatures…) seems to be behind this increase,” analysts at Engie EnergyScan said on Friday.
Negotiations over a stalled pay and conditions deal between Chevron and unions at its LNG facilities in Australia made progress on Friday but fell short of sealing an agreement to end months of labour disputes at the major export sites.
Meanwhile, damage to the Balticconnector gas pipeline between Finland and Estonia has also raised fears over the security of Europe’s key energy infrastructure sites after the Finnish Prime Minister said it could have been done deliberately.
Norway, Europe’s largest gas supplier said on Friday it is closely monitoring the progress of the probe into the Balticconnector damage and that it has increased patrols around its installations.
Supply fears have also been stoked by violence in the Middle East, with Israel instructing operator Chevron to halt natural gas exports through a major subsea pipeline between Israel and Egypt.
Temperatures were expected to drop in Britain and much of Europe over the next few days, raising demand for gas for heating.
“Temperatures to drop somewhere at an average of almost 8 degrees C with the sharpest decline forecast for Belgium,” LSEG analyst Ulrich Weber said.
In the European carbon market, the benchmark contract edged up by 0.14 euros to 85.37 euros a tonne.
Source: Reuters (Reporting By Susanna Twidale; editing by Eileen Soreng)