Page 10 - EurOil Week 11 2023

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European gas prices spike on March

9 amid cold weather, French strike

action and nuclear concerns

EU EUROPEAN gas prices spiked on March 9, as generation, strikes at EDF facilities curtailed
a result of colder weather in northern Europe power supply by 11.2 GW in the morning,
There have been and expectations of further disruptions to LNG according to Bloomberg.
significant LNG and imports and nuclear outages. Industrial action has also left France’s four
power disruptions in The April TTF gas price climbed to €52.9 per LNG terminals unable to operate. There is also a
France. MWh ($600 per 1,000 cubic metres) at the end risk of reductions in LNG sendout at the Milford
of last year, up from €43.6 during the previous Haven LNG terminal because of strong winds.
trading session. This marks the biggest day-on- There may be further bullish sentiment as
day climb in the front-month contract since a result of the European Commission’s call for
November last year, and following a fairly steady companies not to sign any new long-term con-
and significant decline in European gas prices tracts for Russian LNG. While Russian pipeline
over the last three months. gas flow to Europe has slumped dramatically
Demand climbed as a result of colder weather over the past year, Russian LNG deliveries to the
in northern Europe, particularly in Scandinavia continent have remained robust.
and the UK. Even though European gas storage The next few months are expected to be crit-
levels are at a seasonal historic high, the cold ical for Europe to store sufficient volumes of
snap has led to withdrawals late in the season. gas ahead of next winter, which could be much
Meanwhile, lower LNG prices have also led to colder than the exceptionally mild 2022-23 one.
increased shipment purchases by competing Higher prices will make this task harder.
markets such as China. Meanwhile, there is limited upside for extra
Additional cracks discovered at two French Russian pipeline supply, with the Nord Stream
nuclear reactors have renewed concerns about pipelines rendered inoperable by sabotage,
the performance of the country’s reactor fleet. restricted capacity via Ukraine and sanctions
While France was still a net power exporter on preventing the Yamal-Europe pipeline from
March 9, in part because of strong wind power flowing gas westwards. ™

P10 www. NEWSBASE .com Week 11 14•March•2023