Dutch and British wholesale gas prices were largely stable on Wednesday as geopolitical tension in the Middle East and Europe, where Russian drones entered NATO-member Poland’s airspace, failed to offset a balanced market.
The benchmark Dutch front-month contract at the TTF hub (TRNLTTFMc1) was down 0.03 euros at 32.75 euros per megawatt hour (MWh), or $11.23/mmBtu, by 0820 GMT, LSEG data showed.
The Dutch day-ahead contract (TRNLTTFD1) was down 0.30 euros at 32.60 euros/MWh.
The British front-month gas price (TRGBNBPMc1) eased by 0.25 pence to 80.38 pence per therm, while the day-ahead contract (TRGBNBPD1) was up 0.85 pence at 81.25 p/therm.
The market reaction to Israel’s strike on Hamas leadership in Qatar has been quite muted as it did not impact liquefied natural gas (LNG) supply, a trader said.
Likewise, the night’s intense Russian attacks on Ukraine and incursions of several Russian drones into Polish airspace also failed to significantly move prices.
“In the middle of (Norwegian continental shelf) maintenance I’d have expected a little bit more of the premium to be factored in,” the trader said.
A stronger reaction would likely require a combination of simultaneous events such as extended outages in Norway, spot market demand rising from Chinese buyers, sustained geopolitical tensions and adverse weather outlook, he added.
European storage levels remain healthy at just under 80% capacity and planned Norwegian pipeline maintenance comes to an end in the coming weeks, analysts at Northern Gas & Power said in a morning briefing.
“But uncertainty over winter demand and ongoing risks in other supply regions leave prices vulnerable to sudden swings,” they added.
Meanwhile, cooler temperatures are supporting day-ahead prices in Britain on Wednesday morning, the analysts said.
In the European carbon market, the benchmark contract (CFI2Zc1) was down 0.16 euro at 76.74 euros a metric ton.
Source: Reuters