EUROPE GAS-Prices extend downward trend on warmer weather, LNG arrivals

Credit: REUTERS/WOLFGANG RATTAY

LONDON, Dec 24 (Reuters) - Benchmark European and British wholesale gas prices fell on Friday in thin holiday trading as warmer weather and an increased supply of liquefied natural gas (LNG) to Europe offset the impact of concerns over reduced Russian supply.

The British gas contract for day-ahead delivery TRGBNBPD1 was down 45.50 pence at 2.55 pounds per therm by 0959 GMT.

The British weekend contract TRGBNBPWE was down 58.00 pence at 2.57 pounds/therm

The benchmark Dutch front-month contract TRNLTTFMc1 was down 16.38 euros at 106.20 euros per megawatt hour (MWh) while the day-ahead contract TRNLTTFD1 was down 15.70 euros to 108.30 euros per MWh.

"Prices have ignored the drop in Russian supply due the drop in flows via Ukraine, while flows via Poland into Mallnow remained at zero," Engie's EnergyScan said in a note.

"Prices have additional downward potential in the short term," it added.

A gas trader said the decline had been expected as many traders are away for holiday season and concerns over supply have been eased by arrivals of LNG tankers to Europe. LNG/TKUK

Warmer weather expected on Friday through Monday, providing another bearish factor.

Gas traders said concerns over Russian supply remain a bullish factor.

Russian gas giant Gazprom GAZP.MM has not booked gas transit capacity for exports via the Yamal-Europe pipeline for Dec. 24, auction results showed on Friday.

The Yamal-Europe pipeline that usually sends Russian gas to Western Europe was operating in reverse mode for a fourth day on Friday, data from German network operator Gascade showed, shipping fuel from Germany to Poland.

Russian Deputy Prime Minister Alexander Novak said Europe is missing out on additional Russian supplies because of delays to the Nord Stream 2 pipeline, adding he expected Nord Stream 2 to obtain clearance in the middle of 2022.

(Reporting By Marwa Rashad; Editing by Barbara Lewis)

((marwa.rashad@thomsonreuters.com; +447823669044; Reuters Messaging: marwa.rashad.thomsonreuters.com@reuters.net; Twitter: https://twitter.com/marwastweets))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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