British and European prices drop as Russian gas flows resume

/ Oil & Gas / Wednesday, 10 November 2021 06:48

British and European wholesale gas prices fell as Russian gas flows to Europe resumed, according to news reports.

The British contract for next day delivery fell 0.25 pence to 1.85 pounds per therm by 0945 GMT, while the December contract fell 6.90 pence to 1.96 pounds/therm.

The Dutch day-ahead contract was down 1.45 euros at 75.68 euros/megawatt hour.

The Dutch December contract was down 1.6 euros at 76.75 euros/MWh.

Gas flows on the Yamal-Europe pipeline from Russia to Germany rose to their highest level in almost two weeks, data on German transmission company Gascade's website showed, a day after the halt in exports spiked the prices in Europe.

Flows into Germany at the Mallnow metering point, which lies on the Polish border, resumed late on Monday and reached around 9 million kilowatt hours (kWh) on Tuesday, the highest level since October 29.

Increased gas flows into Germany cooled down the prices, analysts said, while the unchanged weather forecast for the remainder of this week also supported the downside sentiment.

Norwegian gas flows to Britain, however, fell slightly due to maintenance at St. Fergus terminal, according to Refinitiv.

Prices also came under pressures as Britain's gas system was 9 million cubic metres (mcm) over-supplied on Tuesday, with supply forecast at around 236 million cubic metres (mcm) and demand at around 227 mcm, National Grid data showed.

Peak wind power generation was forecast at around 9 gigawatts (GW) on Tuesday, dropping to almost 7.6 GW on Wednesday, Elexon data showed. Higher wind output typically reduces gas demand from power plants.

In other markets, the benchmark December 21 EU carbon contract was down 0.24 euros at 60.39 euros a tonne.

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