EUROPE GAS-Prices rise on tightening supply outlook
Dutch and British wholesale gas prices continued to firm on Monday morning amid concerns about pipeline supplies from Russia and Norway as well as liquefied natural gas (LNG) shipments.
The Dutch day-ahead wholesale contract TRNLTTFD1 was up 0.50 euros at 148.50 euros per megawatt hour (MWh) by 0839 GMT, and the benchmark contract for August TRNLTTFMc1 rose by 8.00 euros to a three-month high of 155.00 euros/MWh.
“Fundamentally speaking, not much has changed, Russian flows are stable and everybody is eyeing the Nord Stream 1 maintenance period,” an analyst told Reuters.
Flows of Russian gas to Europe via the Nord Stream 1 pipeline were steady on Monday but remain at just 40% of capacity amid political negotiations over a turbine which was sent to Canada for repairs but its return is delayed due to sanctions.
Germany, where Nord Stream 1 lands, is also preparing for possibility flows could suspend completely beyond currently scheduled pipeline maintenance during July 11-21.
But the threat of a 13% drop in Norwegian gas supplies to a planned strike from midnight on Monday was also providing support, analysts said.
In the UK market, the day-ahead contract gained 33.00 pence to 200.00 pence per therm, its highest level since June 22.
While Norwegian nominations to Britain were higher on Monday, liquefied natural gas (LNG) supply was lower due to a 50% capacity outage scheduled at the Dragon terminal for Tuesday, analysts at Refinitiv said.
“Lower LNG sendout forecast in the week ahead will likely see tighter UK gas market compared to last week,” they added.
The global LNG market is also tightening due to some prolonged outages in the United States and Australia.
“Coal and power markets provide further support, closely watching the temperature outlook in Germany and river levels/temperatures,” the first analyst said.
Ongoing hot weather in Europe could disrupt coal shipments to German power plants and cause cooling issues for the French nuclear fleet, he added.
French utility EDF said on Monday that around 1 gigawatts of nuclear power generation capacity will be reduced until 1500 CET due to a strike at its Saint Alban 1 reactor.
In the European carbon market, the benchmark contract was 0.86 euro lower at 84.72 euros a tonne.