LONDON: Benchmark European and British wholesale gas prices fell on Friday in thin holiday trading as warmer weather and an increased supply of liquefied natural gas (LNG) to Europe offset the impact of concerns over reduced Russian supply.
The British gas contract for day-ahead delivery was down 45.50 pence at 2.55 pounds per therm by 0959 GMT. The British weekend contract was down 58.00 pence at 2.57 pounds/therm.
The benchmark Dutch front-month contract was down 16.38 euros at 106.20 euros per megawatt hour (MWh) while the day-ahead contract was down 15.70 euros to 108.30 euros per MWh.
“Prices have ignored the drop in Russian supply due the drop in flows via Ukraine, while flows via Poland into Mallnow remained at zero,” Engie’s EnergyScan said in a note.
“Prices have additional downward potential in the short term,” it added.
A gas trader said the decline had been expected as many traders are away for holiday season and concerns over supply have been eased by arrivals of LNG tankers to Europe.
Warmer weather expected on Friday through Monday, providing another bearish factor.
Gas traders said concerns over Russian supply remain a bullish factor.
Russian gas giant Gazprom has not booked gas transit capacity for exports via the Yamal-Europe pipeline for Dec 24, auction results showed on Friday.
The Yamal-Europe pipeline that usually sends Russian gas to Western Europe was operating in reverse mode for a fourth day on Friday, data from German network operator Gascade showed, shipping fuel from Germany to Poland.
Russian Deputy Prime Minister Alexander Novak said Europe is missing out on additional Russian supplies because of delays to the Nord Stream 2 pipeline, adding he expected Nord Stream 2 to obtain clearance in the middle of 2022.
