EUROPEAN GAS UPDOWN
BLOOMBERG - June 13, 2022 - European natural gas prices swung between gains and losses as traders bet on whether muted demand will help to ease a tight market.
Warm weather across the region is expected to keep a lid on gas use for heating over the coming week, while a forecast for increased solar energy production in the UK, Germany and Spain may reduce the need for gas-fired power. Yet supply concerns persist, with flows from Russia curtailed just as Europe braces for lower shipments of liquefied natural gas from the US.
Dutch front-month gas, the European benchmark, gained 1% to 83.25 euros a megawatt-hour at 10:51 a.m. in Amsterdam, after earlier losing 3%.
Cuts to Russian supplies in recent months and fears of further curbs have prompted European energy companies to go hunting for new sources of gas to refill storage ahead of the winter. Increased imports of LNG have helped to replenish stockpiles, though an explosion last week at a key Texas LNG export terminal will limit America’s ability to help with the restocking.
Europe’s progress in refilling storage facilities has weighed on prices over the past month, with Friday marking the benchmark contract’s fifth weekly decline.
While Europe’s gas crisis is a “long way from over,” there have been signs over the past month of “at least a temporary easing in market stress,” analysts from Timera Energy said in a note.
Capped Flows
Russian deliveries via the Nord Stream pipeline to Germany -- the biggest link to the European Union -- are set to slip further on Monday, while flows via Ukraine will also remain limited, orders show.
Maintenance in Norway is also set to restrict supplies. Capacity at the Aasta Hansteen field was reduced Monday by an unplanned outage, while flows at the Kollsnes processing plant are set to be cut until Saturday, according to network operator Gassco.
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