Saturday, May 28

Prices mostly fall on strong supply

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LONDON — Most British and Dutch wholesale gas prices fell on Tuesday morning amid continued robust supply.

Both British and Dutch front-month contracts fell, with the British May contract down 5.35 p at 147.65 p/therm and the Dutch equivalent down 2.4 euros at 90.75 euros/MWh.

The Dutch day-ahead contract fell by 5.4 euros to 91.25 euros per megawatt hour (MWh).

Traders said the falls were the result of continued strong supply from both Russia and Norway.

“(The) risk of disruption hasn’t gone away, but we see that daily flows seem to be stable despite every escalation we have seen so far,” a gas trader said.

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Daily nominations for Russian gas deliveries to Slovakia via Ukraine fell on Monday as did flows eastbound into Poland from Germany through the Russia-EU Yamal pipeline, while direct flows from Russia to Germany via Nord Stream 1 were stable.

Gazprom said the dip in flows to Slovakia was in line with customer requests.

In the British gas market, the day-ahead contract rose by 22 pence to 140 p/therm.

The contract bucked the trend of price falls for most contracts with cooler weather expected to increased demand for gas for heating.

Analysts at Refinitiv forecast British local distribution zone demand, which is primarily used for heating, at 128 million cubic meters for Wednesday, up 17 mcm from the previous forecast.

EU Energy Commissioner Kadri Simson said on Tuesday a sixth package of EU sanctions against Russia in response to its invasion of Ukraine is expected very soon.

“EU members are still working to cut dependence on Russian oil and gas, so far with little success…. an embargo on oil exports from Russia seems unlikely for now,” analysts at Rystad said.

In the European carbon market, the benchmark contract rose by 0.64 euro to 84.10 euros a tonne. (Reporting by Susanna Twidale; editing by Nina Chestney)