European Natgas Prices Tumble As Russian Pipeline Flows Finally Increase
European natural gas prices plunged Wednesday after signs Russian gas flows into Europe were increasing ahead of what’s expected to be a miserable winter of tight supplies and high energy costs.
Dutch natural gas futures, the European benchmark, dropped as much as 12% to € 64.14 per megawatt-hour after Russia’s state energy company Gazprom PJSC data showed flows to Europe via Ukraine and Poland increased Wednesday.
“There are currently tentative signs Russia is sending more gas. More than 94 million cubic meters of natural gas are expected to flow through a key checkpoint in Europe’s pipeline network on Slovakia’s border with Ukraine Wednesday. That would mark an increase from roughly 85 million cubic meters on Tuesday and 75 million cubic meters on Monday, according to data from EUStream, which operates Slovakia’s gas transmission system,” Dow Jone’s commodities reporter Will Horner said.
As the heating season has already begun, additional supply is needed in Europe, with gas inventories at the lowest in a decade. In October, Russian President Vladimir Putin said that Gazprom would boost flows into Europe after Russia’s domestic stockpiling was complete.
On Monday, we noted a supply shock hit gas shipments to Germany via Russia’s Yamal pipeline when flows dropped to zero. But the good news today shows shipments along the key pipeline have also picked up.
“If Russia does what Putin said they will do, then there will be a big relief,” Frank van Doorn, head of trading at Vattenfall, was quoted last week at the Flame gas conference in Amsterdam.
This week, a rise in gas flows across multiple pipelines is calming traders’ nerves, and prices are declining. EU gas storage remains well under seasonal trends as forecasts of below-average temperatures in northwest Europe could elevate prices in the coming weeks.
…click on the above link to read the rest of the article…
