Dutch and British wholesale gas prices were mostly down on Thursday morning due to comfortable storage levels, price cap concerns and continued EU gas demand reduction proposals.
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Dutch gas for October was down 13.00 euros at 231.00 euros per megawatt hour (MWh) by 0825 GMT, while the Q4 contract was 10.10 euros lower at 229 euros/MWh.
The British contract for day-ahead delivery fell by 85.00 pence to 320.00 pence per therm.
A push to refill storage levels have helped to ease prices. As of Aug. 31, European inventories were 80.4% a full, a target which had been set for Nov. 1.
Consultancy Wood Mackenzie said high gas prices will continue to drive down European demand to 7% below the five-year average through March, leaving a best-case scenario of storage levels at 31% at winter’s end, in line with the five-year average.
Meanwhile, European Union chief Ursula von der Leyen will outline the European Commission’s ideas on capping energy prices on Sept. 14, a senior Commission official said.
The Commission is also looking at reforming the European Union’s electricity market design in the longer term.
On the bullish side, there are several planned maintenance outages in Norway in September.
An outage at the Troll field has been extended and there is another planned combined outage at Troll and the Kollsnes gas processing plant to Sept. 9. An unplanned outage at Gullfaks has also been extended.
“The upcoming strong bout of Norwegian Continental Shelf maintenance and potential for extensions or further outages should stop prices from falling too far in tandem with the uncertainty that NS1 will restart on Sept. 3,” said Refinitiv’s head of European gas research Wayne Bryan.
The European Union’s top executive said Friday that the bloc’s electricity market “is no longer operating” amid the Ukraine war, and proposed a price cap on Russian pipeline gas.
Russia has halted gas supplies via Nord Steam 1, Europe’s key supply route, for a three-day maintenance outage, intensifying an economic battle between Moscow and Brussels.
Eastbound flows from Germany to Poland through the Yamal-Europe pipeline have also dropped, in line with nominations or requests for gas.
The British October price was 11.00 pence higher at 461.00 p/therm.
In the European carbon market, the benchmark contract was down 1.71 euros at 78.32 euros a tonne.
European Commission President Ursula von der Leyen blamed Russian President Vladimir Putin’s war against Ukraine for the energy crisis and the dramatic rise in gas and electricity prices.
She said Europe’s priority is to save energy because reserves are scarce, although the 27-nation bloc has already reached its goal of filling gas storage to 80% of capacity ahead of the winter months. The target date was Nov. 1.
“We had imagined this would take two more months,” she said in a speech in the German town of Murnau. “We have worked hard to end our dependency on Russian gas, turning instead to other suppliers. As a result, Norway now delivers more gas to Europe than Russia. Furthermore, the U.S. is supplying Europe with considerable volumes of liquid gas.”
Natural gas is used to power industry, heat homes and offices, and generate electricity.