Dutch and British wholesale gas prices edged lower on Friday morning amid steady supply, but the market continues to closely watch the situation in the Middle East as geopolitical risks remain.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was down 0.38 euro at 39.70 euros per megawatt-hour (MWh), or $12.73/mmbtu, by 0809 GMT, LSEG data showed.

In the British market, the day-ahead contract TRGBNBPD1 was down 1.25 pence at 97.25 p/therm.
Total Norwegian exports to the continent were up 6 million cubic metres a day (mcm/d) at 243 mcm/d, LSEG data showed.

Supply from Russia to Europe via Ukraine also remained steady.
Russia’s Gazprom GAZP.MM said it will send 42.3 million cubic metres of gas to Europe via Ukraine on Friday, a volume in line with recent days.

Gazprom also said on Thursday it had signed a memorandum with Hungary on a possible increase in sales of Russian gas.

“Hungary have suggested the access to additional capacity through the Turkstream pipeline may offset some of the loss of flow to Ukraine at the end of the year,” consultancy Auxillione said in a daily research note.

Prices however will continue to see support due to fears over escalating tensions in the Middle East.

“Market participants are concerned about damage to Israeli gas infrastructure that would increase the Middle Eastern call on LNG,” analysts at Energy Aspects said.

“If things worsen, which cannot be discounted, the risk would focus on concerns over ships using the Strait of Hormuz and far greater disruption to LNG supply if Qatari gas exports are disrupted,” the analysts said.

In the European carbon market CFI2Zc1, the benchmark contract edged down 0.70 euro to 64.30 euros a metric ton.
Source: Reuters (Reporting By Susanna Twidale; Editing by Janane Venkatraman)