Dutch and British wholesale gas prices rose on Monday morning, buoyed by news of a deal between the U.S. and China to lower tariffs, brightening the wider economic outlook.
The benchmark Dutch front-month contract (TRNLTTFMc1) gained 1.17 euros to 35.87 euros per megawatt hour (MWh), or $11.68/mmBtu, by 0828 GMT and the July contract was up 0.95 euros at 35.45 euros/MWh, LSEG data showed.
The British June contract (TRGBNBPMc1) rose by 2.61 pence to 85.66 p/therm and the day-ahead contract (TRGBNBPD1) was up 3.75 pence at 80.50 p/therm.
The United States and China said on Monday that they had agreed a deal for a 90-day pause to the tariff war that has disrupted the global economy and set financial markets on edge, pledging to lower tariffs substantially.
The news sent gas prices higher, with no major changes to supply or weather fundamentals, one trader said, adding that continuing macroeconomic and geopolitical uncertainty makes it difficult to gauge proper price levels.
“With TTF prices already trading at levels close to their technical highs, the price increase could be limited,” Engie EnergyScan analysts said in their morning report.
News over the weekend that Ukrainian President Volodymyr Zelenskiy is likely to meet Vladimir Putin in Turkey on Thursday has had only limited impact.
“It is not clear whether this is to negotiate a ceasefire or end the conflict, with a ceasefire being proposed many times in recent days,” consultancy Auxilione said.
Even if the war ended, a resumption in flows of Russian gas to Europe would not happen swiftly, the trader said.
The latter is being discussed at talks between Russia and the United States.
In the European carbon market, the benchmark contract (CFI2Zc1) was up 2.01 euros at 72.40 euros a metric ton.
Source: Reuters