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Prices rise as outages impact Norwegian flows

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LONDON — British and Dutch wholesale gas prices rose on Tuesday morning as Norwegian exports sank due to unplanned outages.

The British day-ahead contract rose by 20.00 pence to 235.00 pence per therm by 0829 GMT, while the within-day contract was up 11.50 pence at 245.00 p/therm.

The Dutch benchmark front-month contract was up 1.30 euros at 170.50 euros per megawatt hour (MWh), while the contract for day-ahead delivery was up 4.13 euros at 170.90 euros/MWh.

Norwegian exports to Britain and Europe are down due to several unplanned outages, resulting in a loss of 70 million cubic meters (mcm) a day of production.

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Flows through the Langeled pipeline to Britain were down to 15 mcm a day, resulting in undersupply.

“The Norwegian outages are seeing UK flows cut dramatically and extensions to these will keep deliveries through Langeled low,” said Wayne Bryan, head of gas research at Refinitiv.

Wind power output is also weak, increasing gas-for-power demand. Wind speeds in Britain are expected to remain around or below normal levels for the next month, Bryan added.

The Nord Stream 1 pipeline started annual maintenance on Monday, which will last until July 21.

Although news that Canada will allow a turbine to be sent Germany calmed the market somewhat on Monday, there is still uncertainty that the outage will finish on time.

“The shutdown of the pipeline has caused European prices for natural gas and electricity to soar again and futures prices now indicate that prices during the autumn and winter will rise above the peak levels from the end of last year,” said analysts at SEB Research.

In the European carbon market, the benchmark contract edged down by 0.16 euro to 84.20 euros a tonne.

(Reporting by Nina Chestney)



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