European gas prices mixed amid rising inventories and supply risks
LONDON, Aug 16 (Reuters) – Wholesale natural gas prices in the Netherlands and Britain were mixed on Friday morning amid concerns about possible supply disruptions due to war between Russia and Ukraine and tensions in the Middle East.
The benchmark front-month contract at the Dutch TTF hub was up 0.55 euros at 09:03 GMT to 38.55 euros per megawatt-hour (MWh), or $12.64 per mmBtu, according to LSEG data.
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The October contract fell by €0.25 to €39.30/MWh.
Both contracts remain at levels not seen since December last year.
In the UK market, the day ahead contract rose 1.5p to 79.5p per therm.
“All stocks are in a bearish direction (for the market) and further declines in share prices are possible,” LSEG analyst Tomasz Marcin Kowalski said in a morning note.
European natural gas storage was 88.47% full at the latest record, approaching the 90% target due to be reached by Nov. 1, according to data from Gas Infrastructure Europe.
But markets are still closely watching geopolitical tensions in the Middle East, while Ukraine's further advance into Russian territory raises the risk that Russian pipelines to Europe could be disrupted.
Gas supplies are still continuing, with Russia's Gazprom saying on Friday it would send 42.4 million cubic metres of gas to Europe via Ukraine.
More than a week after Ukraine surprised Russia with a lightning cross-border offensive, it has scored a string of victories, but the risks are mounting as Ukraine's military makes plans to seize territory and Russia regains a foothold.
“Continuing tensions along the Ukraine-Russia border are raising concerns. This has been happening for some time but the underlying tensions mean markets will continue to react to any news,” consultancy Auxilione said in a note.
On the European carbon market, the benchmark contract increased by €0.05 to €72.16 per tonne.
(Reporting by Marwa Rashad; Editing by Emilia Sithole Matarese)