Bloomberg - - Natural gas prices in Europe continued their record-breaking run as uncertainties about supply security in winter worsened. This also a new high was witnessed amid low wind and a disruption of power assets in Britain s interconnectors.
Uncertainties about Russia s ability to supply the region when it also risks a regional gas crunch are also increasing among traders as temperatures below normal are forecast for the next two weeks.
In the U.K., low wind output has also increased demand for gas to produce electricity. On Wednesday, wind generated accounted for 7.4% of the supplies while gas made up as much as 64% of the U.K. total, according to National Grid Plc. Potential for wind is seen for the rest of the week in the U.K. Germany and Spain, according to a note from forecaster The Weather Co.
The benchmark U.K. front-month contract jumped as much as 10.2% to 72.495 euros $85.67 per megawatt-hour, while the Dutch equivalent scheme soared as much as 9.6% to 180.85 pence $2.50 per therm.
For the next year, German electricity will boost to 104.70 euros per megawatt-hour to 4.9%.
The tropical storm Nicholas has already led to the shutdown of all three production plants at Freeport LNG in Texas with power issues anticipated to be the cause.
Meanwhile, power flows were temporarily curbed between the United Kingdom and Ireland on the Moyle and East-West interconnectors, according to Elexon's remit website. In the Russian gas & gas markets, the focus has moved to European supply. Traders are not convinced of extra deliveries by the biggest supplier even after flows through a key link to Europe have recovered and are now eyeing upcoming auctions for additional transport capacity to Germany in October.
Despite Russian flows being flown via the Polish-German border at Mallnow, the overall flow of Russia remain uncertain and the capacity to increase those further remain unclear, Energi Danmark wrote in a note. Demand is still very high in Europe as low storage levels remain in Asia and in Asia. Without further clarity of Russia s supply situation the market is likely to see more upside.