Dutch and British wholesale gas prices were largely flat on Friday morning, supported by outages and concerns over a tighter global market, partly offset by increasing wind power generation that is expected to reduce demand for gas-fired power next week.
The benchmark Dutch front-month contract at the TTF hub (TRNLTTFMc1) edged up by 0.02 euros to 35.22 euros per megawatt hour (MWh), or $11.78/mmBtu, at 0900 GMT, LSEG data showed.
The British day-ahead contract (TRGBNBPD1) was up 0.50 pence at 83.50 pence per therm.
“The slight uptick in day-ahead prices can be attributed to a continued unplanned outage at the Karsto gas facility in Norway, as flows originally set to arrive in the UK are being redirected to Germany,” Northern Power & Gas analysts said in a morning briefing.
An outage at the UK’s Bacton Perenco site also cut supply, they added.
Norway’s Karsto plant is experiencing processing problems and is also slated for annual maintenance from Saturday until late August.
However, higher wind speeds next week should limit gas-for-power demand, said LSEG analyst Yuriy Onyshikiv.
The market also remains underpinned by hot weather in Asia, lifting demand there, and concerns over secondary tariffs levied by the United States on countries importing Russian energy, which could take volumes away from Europe, analysts said.
Several LNG tankers bound for Europe have changed course in recent days, increasing the prospect of competition for cargo, ANZ commodities strategist Daniel Hynes said in a daily note.
A drop in LNG supply could slow Europe’s efforts to refill gas storage for winter.
“We note that Europe is making good progress on refilling its storage sites, but we still anticipate relatively low end-October stocks, meaning little margin for error if global balances tighten,” Energy Aspects said in a note.
Europe’s gas storage sites are 68.3% full, latest data from Gas Infrastructure Europe shows.
In the European carbon market, the benchmark contract (CFI2Zc1) was down by 0.64 euros at 72.02 euros a metric ton.
Source: Reuters