Dutch and British wholesale contracts rose on Monday morning as strike action loomed at Australian liquefied natural gas (LNG) facilities.
The Dutch September contract TRNLTTFMc1 was 0.75 euro higher at 38.30 euros per megawatt hour (MWh) by 1000 GMT, while the November contract TRNLTTFMc3 rose by 1.22 euros to 52.85 euros/MWh, according to Refinitiv Eikon data.
Unions at Woodside Energy Group’s North West Shelf offshore gas platforms on Sunday announced plans to strike as early as Sept. 2, which could eventually disrupt shipments of LNG from top global exporter Australia.
The Offshore Alliance, which consists of two key unions, will also finalise a strike vote at the Chevron-operated Wheatstone and Gorgon LNG ventures by Aug. 24.
Analysts at Morgan Stanley said the TTF (Dutch gas) forward curve is 5-7% higher over the Sep-to-Apr period than just before the strike news.
“If these prices were to stick, the mere threat of strikes by Australian LNG workers could cost European consumers around $14 billion this winter,” they said.
However, analysts at ING Research said that because European gas storage is now around 91% full, any strength in prices should be short-lived.
“We would need to see a large amount of the at-risk capacity (41.2 million tonnes per year) offline for a prolonged period in order to lead to a significant change in European fundamentals, at least over the next month or two,” the analysts added.
The British day-ahead price TRGBNBPD1 rose by 5.75 pence to 92.00 pence per therm, while the within-day price TRGBNBPWKD jumped by 12.00 pence to 93.00 p/therm.
For the British gas market, the end of a heatwave and variable wind speeds over the coming days was bullish.
Gas-for-power demand is forecast to rise by 19 million cubic metres (mcm) for the day-ahead and by 21 mcm/day over the weekend, according to Refinitiv Eikon data.
There are also no new LNG tankers scheduled to arrive in Britain this month.
In the European carbon market, the benchmark contract CFI2Zc1 inched down by 0.53 euro to 87.48 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)