Dutch and British wholesale gas prices rose on Wednesday morning, rebounding from the day before, after Russian President Vladimir Putin stopped short of a full ceasefire in Ukraine but agreed to a temporary halt on energy infrastructure attacks.

The Dutch front-month contract (TRNLTTFMc1) was 1.41 euro higher at 42.13 euros per megawatt hour (MWh) by 0922 GMT, while the May contract (TRNLTTFMc2) rose by 2.08 euros to 42.60 euros/MWh, according to LSEG data.

In Britain, the day-ahead contract (TRGBNBPD1) was 3.25 pence higher at 103.25 pence per therm.

Prices fell yesterday as the market awaited the outcome of a phone call between U.S. President Donald Trump and Putin.

Putin agreed on Tuesday to stop attacking Ukrainian energy facilities temporarily but declined to endorse a full 30-day ceasefire that Trump hoped would be the first step toward a permanent peace deal.

Prices have rebounded today as Russia and Ukraine accused each other of launching air attacks that damaged infrastructure and as lower temperatures are expected for the first three weeks of April.

Although a temporary stop on energy asset attacks could alleviate gas supply disruption in Ukraine, there were hopes that a full ceasefire agreement could raise the chances of some Russian pipeline gas coming back to the market in the future.

“European gas markets remain stuck between a tight prompt physical market and the possibility of increased Russian gas supplies,” said analysts at Goldman Sachs.

“In our view, end-March gas storage levels are simply too low for European inventories to reach 90% full by the end of summer,” they added.

Storage levels could still reach over 80% full which would be enough to go into next winter but prices would need to stay high enough to continue to attract LNG imports – at least 40 euros but a 45-50 euro range would ensure LNG imports remain robust, they said.

In the European carbon market, the benchmark contract (CFI2Zc1) was 1.33 euro higher at 72.63 euros per metric ton.
Source: Reuters