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Europe Gas-Prices Rise as Markets Await Clarity on Possible Australian LNG Strikes

Dutch and British wholesale gas prices rose on Monday morning as markets await clarity on whether strikes at Australia liquefied natural gas (LNG) facilities will go ahead.

The front-month Dutch contract TRNLTTFMc1 rose by 0.10 euros to 36.05 euros per megawatt hour (MWh) by 0920 GMT, Refinitiv data showed.

The Dutch-day ahead contract TRNLTTFD1 was up 1.72 euros at 33.42 euros/MWh.

The British within-day TRGBNBPWKD price rose by 5.00 pence to 84.50 p/therm, while the day ahead contract TRGBNBPD1 rose by 6.50 p to 84.00 P/therm.

“With talks still ongoing, including drawing up plans to limit the export impact if they do go ahead, markets remain nervous and will continue to do so until this risk passes,” consultancy Auxilione said in a morning note.

The news of possible strikes at the Chevron CVX.N and Woodside Energy Group WDS.AX Australian LNG facilities, which together supply about 10% of the global LNG market, led to a spike in prices last week amid fears Chinese players will outbid European buyers to attract cargoes.

On Monday, Australia’s labour regulator cleared the way for strike action at Chevron’s Wheatstone platform if workers vote in favour of such a step, fuelling concerns the country’s exports could be cut.

“All attention will be on how labour negotiations in Australia develop and whether workers at 3 LNG facilities go on strike,” said analysts at ING Research.

“Elsewhere, China will release industrial output numbers and retail sales for July on Tuesday, which will shed some more light on how the Chinese economy is faring,” they added.

Some gas traders also cited the rise to concerns over escalation between Russia and Ukraine, after a Russian ship fired warning shots at cargo vessel in the Black Sea.

European gas storage sites are 89% full and the continent is getting closer to reach its 90%-full target of Nov. 1 set by the European Commission much earlier than this date.

Refinitiv analyst Tomasz Marcin Kowalski also said that weakening power output from solar and wind on the day-ahead is expected to increase consumption of gas-for-power.

In Britain, peak wind generation is expected to reach 6.5 gigawatts (GW) on Monday and fall to 4.5 GW on Tuesday, out of a total metered capacity of 22 GW, Elexon data showed.

In the European carbon market, the benchmark contract CFI2Zc1 was nearly flat, rising only 0.10 euros to 86.80 euros a tonne.

Source : Nasdaq

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