EUROPE GAS-Prices fall on expectations of higher LNG imports

LONDON, Oct 31 (Reuters) - British and Dutch wholesale gas prices fell on Monday morning on forecasts for stronger wind and expectations for higher liquefied natural gas (LNG) imports to Europe amid COVID restrictions in China.

The Dutch November contract TRNLTTFMc1 was 15.00 euros lower at 94.50 euros per megawatt hour (MWh) by 0931 GMT, while the December contract TRNLTTFMc2 was 13.02 euros lower at 126.30 euros/MWh.

The British price for November delivery TRGBNBPMX2 fell by 39.25 pence to 205.00 pence/therm.

"The latest bout of COVID restrictions in China and declining demand in Asia overall should see (European) LNG imports remaining robust. This should ensure the record level of cargoes into north-west Europe and UK continues," analysts at Refinitiv said.

Rising COVID case numbers from outbreaks across China have prompted a tightening of local curbs and lockdowns, as the economic toll of the country's zero-COVID policy mounts.

Data released on Monday showed that Chinese factory activity unexpectedly fell in October, reducing energy demand.

The rise of gas imports from Norway also put pressure on prices. Total Norwegian exports nominations to Britain and continental Europe were up 16 million cubic metres (mcm) per day at 305 mcm.

Eastbound gas flows via the Yamal-Europe pipeline to Poland from Germany remained strong, while flows of Russian gas to Europe via Ukraine were stable.

Mild weather also helped gas storage across Europe to continue building up. European gas inventories are more than 94% full. Storage levels in United Kingdom, France, Belgium, Denmark and Portugal are 100% full, Gas Infrastructure Europe data showed.

In the UK, the gas system was 3.1 mcm under-supplied, according to National Grid data.

Peak wind generation is forecast at 12.3 gigawatts (GW) on Monday and 15.2 GW on Tuesday, out of total metered capacity of around 20 GW, Elexon data showed.

Stronger wind output typically reduces demand for gas from power plants.

In the European carbon market, the benchmark contract CFI2Zc1 was 2.63 euros lower at 78.58 euros a tonne.

How much of Europe’s gas storage is filled

Russian gas volumes to Europe

(Reporting by Bozorgmehr Sharafedin; editing by Nina Chestney)

((; Twitter: @bozorgmehr;))

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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