Europe’s Natural Gas Prices Seesaw as Supply Comes Into Focus
Europe’s Natural Gas Prices Seesaw as Supply Comes Into Focus | OilPrice.com
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Europe’s benchmark natural gas prices seesawed in Wednesday morning trade in Amsterdam as concerns about supply amid heightened tensions in the Middle East are being offset by rising LNG imports ahead of the winter heating season.
Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, were down by 1% to $43.10 (39.55 euros) per megawatt-hour (MWh) at 12:13 p.m. in Amsterdam on Wednesday in volatile trade, after settling 1.4% lower on Tuesday.
As Europe prepares for the winter amid uncertainty about the remaining Russian pipeline gas flows, LNG imports have been rising in recent days.
This week, LNG cargo imports at northwest Europe’s import terminals have jumped to their highest level since April, according to grid data compiled by Bloomberg.
Europe’s gas prices have risen in recent weeks amid concerns about supply as tensions in the Middle East flared up again in early October with the Iranian missile attack on Israel.
The higher gas prices in Europe have prompted several cargoes to divert from Asia and travel to Europe. This could be reassuring for Europe’s supply, but increased competition could drive both European and Asian spot LNG prices higher.
Europe’s gas storage is already 95% full, according to data from Gas Infrastructure Europe.
However, gas in storage wouldn’t cover Europe’s needs for winter, and the volumes of gas in storage are slightly lower compared to this time last year, mostly due to lower numbers of incoming LNG cargoes.
Now that more cargoes are headed to Europe, supply concerns could ease, but prices are set to increase with rising seasonal demand and competition between Europe and Asia for LNG supply.
Mild weather in October has reduced demand, but there are forecasts that northwest Europe will see a cold start to November, meaning that the race to secure gas supply will begin in earnest.
Additional supply concerns arise from the fact that the Ukraine-Russia deal on the transit of Russian gas to Europe through Ukraine ends on December 31, 2024.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com
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