British and Dutch gas prices fell on Friday morning as Norwegian gas via a key pipeline to Britain resumed after a 5-day halt for unplanned repairs, highlighting Europe’s continued edgy supply picture.
The benchmark front-month contract at the Dutch TTF hub eased 0.18 euro to 33.00 euros per megawatt hour (MWh) by 0818 GMT, equivalent to $10.53/mmBtu, according to LSEG data.
The Dutch day-ahead contract was down 0.45 euros at 32.90 euros/MWh.
In the British market, the day-ahead contract fell 0.45 pence to 78.75 pence per therm and the within-day contract eased by 0.25 pence to 79.25 p/therm.
The flow of Norwegian gas to northern England via the Langeled pipeline resumed on Friday following a June 2 outage that shut down the Nyhamna processing plant.
Nyhamna is ramping up on Friday to 45 million cubic metres (mcm) per day, about 56% of its total capacity, with flows on Langeled seen at 43.22 mcm/day, according to British and Norwegian gas transmission data.
With Nyhamna expected to return to normal capacity over the weekend, this should end market fears seen earlier this week when prices rallied to a six-month high, consultancy Auxilione said in its daily market update.
“Despite that return, the market remains nervous and any global issue can knock its confidence and cause some level of panic,” it added.
The event highlighted the precarious state the market is currently in, Danial Hynes, senior commodity strategist at ANZ said in a report.
“Europe’s storage facilities were designed to smooth out shifts in seasonal demand, rather than withstand major disruptions to supply,” he added.
The Nyhamna outage occurred just as the outlook for demand is improving, with consumption rising over the summer due to high air conditioning use, which could reduce efforts to restock storage before next winter, Hynes said.
Winter storages are now dependent on Norwegian supply, and despite this week’s outage, European buyers seem less willing to compete for alternative liquefied natural gas (LNG) supplies with Asian buyers, LSEG analyst Timothy Crump said in a weekly market report.
Current LNG arrival schedules showed only two cargoes expected into France, one into the Netherlands and none into Germany next week, he highlighted.
European gas storage facilities were last seen 70.86% full, but refilling at a slower pace than a year ago, according to Gas Infrastructure Europe (GIE) data.
In the European carbon market, the benchmark contract fell by 0.77 euro to 71.33 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Kim Coghill)