Dutch, British wholesale gas prices mixed on concerns over Norwegian outage, healthy inventories

LONDON: Dutch and British wholesale gas prices were mixed on Wednesday as healthy gas inventories helped offset growing concerns over upcoming Norwegian outages in August and low flow of liquefied natural gas (LNG) heading to Europe.

The benchmark front-month Dutch contract rose by 1.40 euros to 34.00 euros per megawatt hour (MWh) by 0813 GMT, according to Refinitiv Eikon data. The September contract fell by 0.94 to 32.96 euros/MWh.

Maintenance at the Dvalin gas field has been extended to July 28, while maintenance is also scheduled at other sites such as the Troll field and Kollsnes processing plant in August.

“Dvalin extension shows that maintenance might not be going as planned. In addition, options are expiring tomorrow and there is a lot of interest on the 35 (euros) mark which is one of the reasons why we’re heading there,” a European gas trader said.

Wayne Bryan, head of European gas research at Refinitiv said that LNG supply concerns are also increasing with the Japan Korea Marker (JKM) for Sep delivery now at its highest level since June 21.

The JKM -widely used as an Asian benchmark - rose after Beijing launched a new mechanism linking retail residential gas prices with distributors’ fuel purchasing costs.

The policy could increase Chinese LNG demand by passing on costs more evenly, what may force Europe to compete for the molecules. No LNG tankers are scheduled to arrive at British ports, with only seven tankers scheduled to arrive at Belgium or the Netherlands before the end of the month.

Europe’s natural gas market will remain tight in the coming years until the continent is ready to receive larger volumes of liquefied natural gas (LNG), Equinor CEO Anders Opedal told a news conference on Wednesday.

In Britain, the day-ahead price was 7.00 pence higher at 84.50 pence per therm.

Lower nuclear power generation in Britain continued to support prices, with a combination of planned and unplanned outages seeing production fall to 2.3 GW on Tuesday, Refinitiv’s Bryan said. In the European carbon market, the benchmark contract edged up by 1.41 euro to 93.34 euros a tonne.