British and Dutch gas prices fell on Wednesday from recent highs on stable Russian gas supplies to Europe, liquefied natural gas (LNG) flows and profit taking.
The British day-ahead gas price fell by 16.7% to 408 pence per therm by 0947 GMT. The British front-month contract was down by 21.13% at 418 p/therm.
The equivalent Dutch front-month contract TRNLTTFMc1 fell 16.9% to 175 euros per megawatt hour (MWh).
“Prices are starting to react to fundamentals being that we have too much gas coming our way and the fact that Russian gas is in full flow so we’re over-supplied,” a European gas trader said.
He added that there was strong profit taking since Tuesday following price spikes this week.
“The question is: will gas still be flowing in a few days? Nobody knows, but since it’s summer then maybe it doesn’t have to, unless we see more countries enforce storage filling then it will be an expensive summer,” he said.
The so-called summer gas season runs from April to October, where there is usually less demand and gas is injected into storage for the winter.
Russian gas delivered through pipelines continued to flow via Poland westward into Germany while flows into Slovakia via Ukraine remained at recent high levels, pipeline operator data showed on Wednesday.
Westward flows at the Mallnow border point on the Yamal-Europe pipeline stood at around 7.7 million kilowatt hours (kWh/h) per hour at 0800 GMT, after flowing at 12.9 kWh/h overnight, data from operator Gascade showed.
The European Commission published plans on Tuesday to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030”.
The Commission said gas and LNG from countries like the United States and Qatar could this year replace more than a third, 60 billion cubic metres (bcm), of the 155 bcm Europe gets annually from Russia.
Analysts at Engie’s EnergyScan said that with global liquefaction capacity set to increase only moderately this year, Europe will need to take the extra volumes mainly from Asia.
Source: Reuters (Reporting By Marwa Rashad; editing by Nina Chestney)