Dutch wholesale gas prices fluctuated on Wednesday morning as traders gauged the impact of full inventories against potential supply disruptions at Australian liquefied natural gas (LNG) facilities and Norwegian maintenance.
The front-month Dutch contract fell by 1.15 euros to 38.70 euros per megawatt hour (MWh) by 0815 GMT after trading as high as 42.15 euros/MWh earlier in the morning, Refinitiv data showed.
The October contract was up 3.20 euros at 44.30 euros/MWh, having traded as high as 45.80 euros/MWh.
A potential strike at Australian LNG facilities continues to dominate sentiment, analysts said.
Woodside Energy, operator of Australia’s largest LNG facility, reported “positive progress” in wage talks but a union alliance said key differences remained.
Australian exports make up around 10% of global LNG supply and threat of strikes has led to higher European gas prices on concerns that cargos destined for Europe could be sent to Asia to make up for any shortfall.
With the threat of possible strikes looming, the Gorgon facility operated by Chevron is already holding back some supply from the spot market, Daniel Hynes, senior commodity strategist at Australian ANZ bank said in a note.
In Europe, gas storage levels across Europe were last seen 89.8% full, according to latest data from Gas Infrastructure Europe, effectively reaching a 90% target mandated by the European Union for Nov. 1.
While current gas inventories are 179 terawatt hours (TWh) above normal levels for the time of year, this surplus could dwindle to 78 TWh by December, SEB bank commodities analyst Ole Hvalbye said in a research note.
With a heavy maintenance schedule between Aug. 15 and Nov. 7 cutting Norwegian natural gas exports by 0.2 TWh/day, year-end inventories might only exceed normal levels by 29 TWh, he added.
“This suggests that EU TTF prices will need to rise as winter approaches, a trend somewhat reflected in current pricing,” Hvalbye said.
A ramp-up in Asian demand for LNG from Japan and China could also support prices this winter, he added.
In the British market, the within-day contract rose by 2.50 pence to 92.50 p/therm, with the day-ahead contract down 0.50 pence at 89.00 p/therm.
Peak wind power output was forecast at 2.7 gigawatts (GW) on Wednesday rising to 9.5 GW on Thursday, Elexon data showed.
In the European carbon market, the benchmark contract rose by 0.72 euros to 87.85 euros a tonne.
