Europe Gas: Prices extend gains amid LNG concerns, colder weather
European and British wholesale gas prices extended gains from the previous day, driven by colder weather forecasts and to ensure competitive pricing with Asia for deliveries of liquefied natural gas (LNG).
The March contract at the Dutch TTF hub was up €0.80 to €45.73 per megawatt hour (MWh), or $13.94/MMBtu, after trading as high as €46.45/MWh earlier on Friday, LSEG data showed.
The April TTF contract was up €0.35 at €45.85/MWh and the day-ahead contract gained €1.25 to €46.55/MWh.
The British April contract was up by 2.40 pence at 109.55 pence per therm, with the day-ahead up 0.75 pence at 110 p/therm.
Prices continued their rebound from Thursday, after falling to their lowest levels this year earlier this week.
"It was fears of a drop in European LNG imports that really provided support for prices," analysts at Engie EnergyScan said in a daily note.
LNG tankers have favored Europe as a destination due to higher prices there compared to the main competing market Asia, but that price spread has narrowed as European prices fell.
"We suspected that European LNG imports were at risk, especially as weak freight rates reduce the advantage of the European destination for U.S. LNG exporters," Engie's analysts said.
On Friday, Equinor also announced a four-day outage from March 10 at its Hammerfest LNG plant in Arctic Norway, Europe's biggest.
This is in addition to a lengthy annual maintenance outage scheduled from April 22 until July 10 this year.
Demand for heating is set to rise next week and the latest longer-term forecasts were also revised colder from the middle of March, LSEG analyst Wayne Bryan said.
EU gas storage sites were last seen 39.54% full, some 24% lower than at the same time last year, data from Gas Infrastructure Europe showed.
In the European carbon market, the benchmark contract was down €0.56 at €72.22 a metric ton.
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