Franco Abdulkader Omeich - European natural gas prices slumped as much as 9% with LNG imports near record levels and French nuclear output steady, even as the region battles a blast of winter weather. Forecasts show a reprieve starting next week, with the southern part of the continent expected to see warmer temperatures.
The Arctic weather is testing Europe’s resiliency during the energy crisis, with Russia curbing gas shipments to the region. So far, gas prices haven’t been as volatile as they were last week, even as freezing temperatures shroud the north and snow blankets London.
Energy Latest: UK Readies Coal Plants as Snow Tests Grid Liquefied natural gas shipments to northwest Europe have soared as the region seeks to replace fuel it would ordinarily secure from Russia. Germany’s first floating LNG terminal is set to arrive at the port of Wilhelmshaven this week, with gas flows to start Dec. 22. Europe’s storage facilities are about 88% full, higher than usual for this time of year, and in Germany, the region’s largest economy, the level is 94%, according to data from Gas Infrastructure Europe. The focus is on how quickly the buffer will be used throughout the winter.
Germany “most probably” won’t face gas rationing this year or next, even amid lower Russian supplies, Deutsche Bank analysts said in a note on Monday. Contracts are expected to average slightly over €100 per megawatt-hour in 2023, “with winter weather and impact of China reopening key sources of uncertainty,” they added.
Dutch front-month futures, the European benchmark, fell 6.3% to €130.40 per megawatt-hour by 10:16 a.m. in Amsterdam. Earlier the contract dropped to its lowest level since Dec. 2. The UK equivalent declined 6% Other factors are helping to take the pressure off Europe’s gas markets, including an increase in pipeline flows to Italy from Algeria. Wind power generation in Germany and the UK is poised to rise from next week after a period of low-output. French nuclear generation is at the highest level since March. Electricite de France SA didn’t extend any outages over the weekend, and two more reactors could be producing power by the end of the week.
Comments