British gas prices rise amid uncertainty over winter supply

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British gas prices rise amid uncertainty over winter supply

Oct 22 Reuters - British and European wholesale gas prices firmed on Friday morning, supported by forecasts of higher demand the next few days, with curve contracts mixed amid lingering supply uncertainty for this winter.

The British day-ahead price for gas gained 7 pence to 210.00 pence per therm by 0912 GMT.

The TTF equivalent was up 2.30 euros at 88.50 euros per megawatt hour MWh Analysts at Refinitiv said the outlook for the TTF day-ahead was bullish on weaker heating demand in Germany, stronger gas-for-power demand and stronger Russian flows via Mallnow on Friday morning.

In the forward market, supply this winter remains a key concern, with European storages still below the 5 year average.

The market will remain tight and susceptible to price swings due to a lack of additional capacity bookings to Europe by Russian supplier Gazprom, Refinitiv analysts said in a weekly report.

The Dutch wholesale gas price for November was 2.25 euros lower at 90.00 euros MWh, with the December contract 0.03 euros higher at 89.00 euros MWh.

The UK November contract was up 4.25 pence at 225.25 pence per therm.

Asia spot and TTF prices have decoupled from all technical ceilings and are trading at elevated levels well before the peak winter month of January and could go to any price the next buyer is willing and able to pay, Kaushal Ramesh, senior gas analyst at Rystad Energy said in a weekly gas market note.

Outages at LNG facilities could remove an incremental 4% of monthly supply, equal to 20 cargoes, from November through February, adding to supply tightness and putting upward pressure on prices, the analyst added.

Any delays to the start-up of the Nord Stream 2 pipeline and of new LNG facilities at Calcasieu Pass and Sabine Pass in the US, which Rystad expects in the first quarter, offered upside risk to prices, Ramesh said.

Russia can start supplies of natural gas to Germany via the Nord Stream 2 pipeline as soon as it gets the green light from Russia, President Vladimir Putin said on Thursday.

That certification could easily take until July 2022 to obtain given the international complexity of the issue and the amount of legal scrutiny NS 2 has attracted, analysts at Energy Aspects said in a note.

The benchmark Dec 21 EU carbon contract gained 1.78 euros to 59.76 euros per tonne.