British wholesale gas exceeds 3 pounds/therm for first time
Reuters
Published Oct 06, 2021 09:26
Updated Oct 06, 2021 17:51
By Nina Chestney and Nora Buli
LONDON (Reuters) -British wholesale gas for day-ahead delivery breached 3 pounds/therm for the first time on Wednesday morning amid an extended global energy market rally.
The British day-ahead contract rose by 0.41 pounds, or 14.7%, to a new all-time high of 3.20 pounds/therm by 0807 GMT.
Both British and Dutch wholesale gas prices have experienced fresh surges this week due to low gas stocks, lower supply from Russia, colder temperatures, lower wind output and lower generation from some French nuclear plants due to a strike.
Dutch wholesale gas at the TTF hub broke the 100 euro level yesterday and the front-month contract is now trading at around 138.60 euros per megawatt hour.
"Low gas inventories across the globe as winter approaches have been pushing up demand in the physical market whilst supplies have been slower to respond," said analysts at ING.
But European energy commissioner Kadri Simson said on Wednesday that EU countries have enough gas in storage to last through winter, and the surge in prices shows the need to quickly switch to renewable sources and reform the EU gas market. [nL8N2R21HX]
"Gas underground storage is above 75% across Europe. This level is lower than the ten-year average, but adequate to cover the winter season needs," she told the European Parliament.
Simson plans to present a plan to overhaul the gas market by the end of the year.
In wider energy markets, prices are also rallying.
Oil hit a multi-year high on Wednesday above $83 a barrel, supported by OPEC+'s refusal to ramp up production more rapidly against a backdrop of concern about tight energy supply globally. [O/R]
European power and coal prices are also at multi-year or record highs.
Regional natural gas markets in the United States are seeing prices for this winter surge and Asian liquefied natural gas (LNG) prices are at record highs on sustained demand from China amid a power crunch and competition with Europe for LNG cargoes.
"We are currently living exceptional circumstances because the world gas market has never been in a situation where Asia and Europe were obliged to compete fiercely for the marginal LNG cargo available (as the latter was supposed to benefit from comfortable pipeline supply)," said analysts at Engie EnergyScan.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.