British and Dutch gas prices remained firm on Thursday morning on on lower flows of liquefied natural gas (LNG) and concerns that Russian gas deliveries could be targeted by U.S. sanctions.
The British day-ahead gas rose 21 pence to 426 pence per therm by 0951 GMT.
The April contract TRGBNBPMJ2 jumped 24.96 pence to 435 pence/therm.
The Dutch front-month contract TRNLTTFMc1 hit a record high with a gain of 9.50 euros to 182.50 euros/MWh.
“The market doubts the sustainability of Russian pipeline flows and also LNG flows … not to mention the consequences of a possible further tightening of sanctions,” said analysts at Engie’s EnergyScan.
“The war is already causing damage to Ukraine gas facilities, with gas production significantly down and two gas distribution pipelines in the Kharkiv region hit by an air strike.”
Gazprom said on Thursday that it was shipping gas to Europe via Ukraine in line with customers’ requests.
Russian westbound gas flows via the Yamal-Europe pipeline to Germany from Poland stopped on Thursday, data from the Gascade pipeline operator showed, while bids remained for supplies in both directions.
“Fundamentals have been largely overridden with geopolitical concerns,” Refinitiv analysts said.
Supplies of Russian LNG to Europe have been disrupted by uncertainty over whether ships can discharge cargoes at European ports because of sanctions imposed on Moscow, according to ship tracking data and trade sources.
In the UK, the LNG sendout has fallen to 65 million cubic meters per day over the past two days, with several Russian cargoes removed from the schedule, they said, adding that this was another bullish factor supporting prices, along with expected cooler weather next week.
Britain blocked its ports to Russian-associated vessels on Monday and The EU is also considering banning Russian ships from ports.
In carbon markets, the European Union benchmark carbon price CFI2Zc1 was down 3.75 euros at 64.74 euros a tonne.
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Source: Reuters (Reporting by Marwa Rashad Editing by David Goodman)