EUROPE GAS-Prices ease on shorter than feared Norwegian outage

EUROPE GAS-Prices ease on shorter than feared Norwegian outage

June 4 (Reuters) – Dutch and British gas prices fell on Tuesday morning from touching a six-month high a day earlier after operator Gassco confirmed a Norwegian outage would take less time than feared to fix.

The benchmark front-month contract at the Dutch TTF hub fell by 1.41 euros to 34.99 euros per megawatt hour (MWh), or 11.15 USD/mmbtu, by 0924 GMT, according to LSEG data.

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The Dutch day-ahead contract was down 1.25 euro at 34.85 (MWh).

In the British market, the day-ahead contract was down 4.25 pence at 85.00 pence per therm.

Prices in Europe and Britain hit their highest levels since early December on Monday as an unplanned outage at Norway’s offshore Sleipner Riser platform curbed supply.

“With Europe now more reliant on Norwegian gas than ever before, now that Russian pipeline flows are all but a thing of the past, eyes now focus on the announcements from Gassco AS, who operate the Norwegian offshore network,” consultancy Auxilione said in a market report.

Norway in 2022 overtook Russia as Europe’s biggest gas supplier after Moscow’s invasion of Ukraine severed decades-long energy ties.

Gassco on Tuesday morning said the issue would take two days to fix, helping to allay market fears the problem could be long lived.

“The market had been anticipating a longer-term disruption,” a trading source said.

Despite the dip, prices remain elevated and were also driven by increased liquefied natural gas (LNG) demand in Asia due to a heatwave, concerns about Russian gas supply to Austria and slower-than-expected ramp-up of North American exports, Norbert Ruecker, head of economics and next generation research at Julius Baer said in a note.

“We believe that these concerns are overdone, as flows should return to normal, and storage is still ample,” he added.

Europe’s dependence on LNG imports was an issue of price, not supply, Ruecker said.

European gas storage facilities were last seen 70.49% full, according to Gas Infrastructure Europe (GIE) data.

In the European carbon market, the benchmark contract dipped by 0.41 euro to 74.17 euros a metric ton.

(Reporting by Nora Buli and Susanna Twidale, additional reporting by Marwa Rashad)