EUROPE GAS-Prices fall as higher Norwegian supply offsets cuts to Italy

Dutch and British wholesale gas prices fell on Monday as a rebound in Norwegian supply helped to ease concerns over Russian supply after Gazprom's decision to cut gas deliveries to Italy to zero.


Reuters | London | Updated: 03-10-2022 14:44 IST | Created: 03-10-2022 14:43 IST
EUROPE GAS-Prices fall as higher Norwegian supply offsets cuts to Italy
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Dutch and British wholesale gas prices fell on Monday as a rebound in Norwegian supply helped to ease concerns over Russian supply after Gazprom's decision to cut gas deliveries to Italy to zero. In the Dutch market, the day-ahead price was 12.55 euros lower at 150.95 euros per megawatt hour (MWh) by 0900 GMT, while the benchmark forward month contract fell by 9.45 euros to 176.55 euros/MWh.

In the UK, the day-ahead contract was down 2.50 pence at 167.50 pence per therm, and the December price was 38.00 pence lower at 476.00 pence/therm. Norwegian gas nominations, or requests for gas, for Britain, Germany, the Netherlands, France and Belgium rose to 341 million cubic metres (mcm) from 294 mcm the previous day.

On Saturday, energy group Eni, the biggest importer of Russian gas in Italy, said that Russian gas supplies through the Tarvisio entry point would be at zero for this weekend, with Gazprom blaming the disruption on regulatory changes in Austria. The situation is expected to remain the same until Oct. 4.

"The strong rebound in Norwegian supply helped alleviate worries about Russian supply," said analysts at Engie's EnergyScan. Analysts at investment bank Jeffries said that decision to cut gas deliveries to Italy to zero tightens Europe's gas balance by an additional 4 billion cubic meters (bcm) this winter and around by around 8 bcm in 2023.

"Europe can still pull through a normal winter given the high level of gas inventories and good spot LNG availability. However, 2023 looks increasingly challenging," the report said. The International Energy Agency (IEA) said global gas markets are expected to remain tight next year as Russian pipeline gas supplies dwindle and gas demand falls in Europe in response to energy saving measures and high prices.

At a meeting in Brussels on Friday, ministers from the 27 EU member states approved levies on energy firms' windfall profits to try to contain an energy price surge aggravated by Russia's war against Ukraine, but disagreed about whether and how to cap runaway gas prices. In the UK, Britain's gas system was 10.2 mcm under-supplied, according to National Grid data.

Peak wind power generation is forecast at 13.7 gigawatts (GW) on Monday rising to 15.5 GW on Saturday, out of a total metered capacity of nearly 20 GW, Elexon data showed. In the European carbon market, the benchmark contract was down by 1.5 euro to 65.17 euros a tonne.

 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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