[ad_1]
(Bloomberg) — European natural gas prices surged to their highest this year after supplies from Norway slumped, highlighting the risks of being overly dependent on one major supplier.
Most read articles on Bloomberg
Dutch natural gas futures prices rose more than 13% on Monday, the most this year. It is unclear how long an unplanned outage at Norway’s giant Nyamna natural gas processing plant will last. At the same time, Norwegian natural gas flows into the Easington terminal, which receives a third of Britain’s total supplies, fell to zero.
The outage shows Norway’s pivotal role in supplying Europe after Russian pipeline supplies were all but halted following the invasion of Ukraine. Even after the energy crisis, the market remains highly sensitive to supply issues, with prices reacting quickly to even the slightest deviations from seasonal maintenance schedules.
Alfred Skaar Hansen, senior vice president of system operations at Gasco, said in an email that Equinor is currently investigating the cause of the problem. The problem could be in the part of the pipeline for the Sleipner natural gas field in the North Sea that connects Easington to Nyhamna, he said.
“It’s not yet entirely clear how long the repairs will take,” Skaal Hansen said.
Front-month Dutch natural gas futures, Europe’s benchmark, rose 12.18% to 38.39 euros per megawatt hour as of 12:14 p.m. Amsterdam time. The British contract rose 15% to its highest since October.
The rise also highlights that with storage already more than 70% full and a slow recovery in European industrial demand, the market remains susceptible to extreme volatility.Gas futures have risen for three consecutive months, having risen 18% in May.
“The unplanned power outage in Norway has once again highlighted Europe’s reliance on imports,” said Ole Hansen, head of product strategy at Saxo Bank.
Gasco said on its website that due to upstream and downstream restrictions, Nihamna and Easington will be closed until at least Wednesday.
LNG imports to Europe have fallen in recent weeks due to rising demand in Asia, where heatwaves have boosted consumption for cooling. That’s intensifying competition for cargoes between Europe and Asia, Saxo Bank’s Hansen said.
In the power market, day-ahead electricity prices in Germany jumped to 114.25 euros per megawatt-hour, the highest since January, according to Bloomberg broker prices. Day-ahead bids on Sunday closed at the highest since December. Month-ahead prices also rose on Monday.
–With assistance from Kari Lundgren and Eamon Akil Farhat.
Most read articles on Bloomberg Businessweek
©2024 Bloomberg LP
[ad_2]
Source link
