LONDON, January 5 – European gas prices rose today as gas flowed east for the 16th day in a row along a pipeline that typically carries deliveries from Russia to Europe and political tensions remained high.
The wholesale gas price on a benchmark contract rose by as much as 6% as reverse flows from Germany to Poland on the Yamal-Europe pipeline continued to cause concern, a day after European prices climbed more than 30% amid concerns over low supplies from Russia as colder weather approaches.
Russian energy exports are also the focus of attention due to a wider dead end between Russia and the West, especially over an accumulation of Russian troops near neighboring Ukraine, which is trying to forge closer ties with NATO.
“The European gas market is again increasingly nervous … This is mainly due to the weakness of pipeline deliveries via Ukraine from Russia,” said Barbara Lambrecht, analyst at Commerzbank, in a note. of research.
“The situation on the European gas market also remains tense in view of political tensions, especially since an increase in demand for LNG (liquefied natural gas) from Asia is once again feared.
She was referring to an additional factor that worries traders – a warning from Indonesia that its coal supply situation is critical after announcing an export ban this month to avoid blackouts of domestic generators.
Some European Union lawmakers have accused Russia, which supplies around a third of European gas, of using the crisis as leverage.
They say Moscow has restricted gas flows to gain approval to start the new Nord Stream 2 pipeline, which will supply gas to Germany.
Russia has denied the claims and said the pipeline will boost gas exports and help ease high prices in Europe. He said he was meeting his contractual obligations on gas deliveries.
Moscow also denies US claims that it is planning an invasion of Ukraine, which it accuses of building up forces in the east of the country.
Europe has been at the heart of an energy crisis since last year, when the lifting of Covid-19 restrictions placed huge demands on depleted natural gas stocks.
Lower flow rates
The wholesale price of Dutch benchmark gas for the first month rose from € 1.75 this morning to € 91.25 per megawatt hour at 10:52 am GMT, after trading at € 95.35 per megawatt hour (MWh).
The UK equivalent contract for the first month rose 5 percent to 2.24 pounds per therm.
However, flows from Germany to Poland were significantly lower than the previous day.
Some traders said this could indicate that flows may return to the west soon, but that there will be a bearish impact on the market once definitive data indicates a change in direction.
Eastbound volumes fell just below 1.5 million kilowatt-hours per hour (kWh / h) this morning, compared to over 9 million kWh / h yesterday, according to Gascade’s latest data from the Mallnow metering point. at the German-Polish border.
“Yamal flows appear to have been linked to abnormally colder temperatures in Russia even in recent months, with deliveries dropping as temperatures drop in St. Petersburg or Moscow,” CIHI analyst Tom Marsec said. -Manser.
Capacity nominations for Russian gas flows from Ukraine to Slovakia via the Velke Kapusany border point, another major route, remained weak on Wednesday, providing another bullish signal for prices.
Nominations stood at 286,481 megawatt hours (MWh), a little above yesterday’s level, but still well below levels seen in December, according to data from Slovakian pipeline operator Eustream. – Reuters