Gas Prices Rise on Lower Wind and Sanctions Concern

OIL AND GAS - LONDON. British and Dutch gas prices rose on Friday morning with low wind power output increasing gas-for-power demand and as concerns built over possible sanctions on imports of Russian gas to Europe in response to the war in Ukraine.

In the British gas market, the day-ahead price was 5.00 pence higher at 238.00 pence per therm by 0922 GMT, while the weekend contract was up 4.50 p at 240.50 p/therm.

"Low wind speeds should support (British) gas-for-power consumption today, which is forecast at 60 million cubic metres/day (mcm), strongly up from 38 mcm/d yesterday,” analysts at Refinitiv said in a daily research note.

The European Parliament on Thursday made a non-binding proposal for an immediate EU-wide full embargo on Russian energy imports, including natural gas.

The Parliament has no formal power to impose sanctions and member states are struggling to agree on whether to include more strategically important oil and gas in the measures.

Hungarian Prime Minister Viktor Orban rejected the idea on Thursday, saying it would wreck Hungary's economy.

Traders, however, said the vote highlighted the fact sanctions on Russian gas remain an option.

In the Dutch market, the front-month contract rose 3.85 euros to 108.15 euros per megawatt hour (MWh).

Russian gas deliveries to Germany through the Nord Stream 1 pipeline across the Baltic Sea remained strong on Friday while flows to Europe through Ukraine dipped slightly, inline with customer requests Russian gas giant Gazprom said.

French gas transport network operator GRTgaz said it has put in place measures that can be invoked to limit gas supply to customers in the event of shortages, and called on shippers to fill underground storage ahead of next winter.

In the European carbon market, the benchmark contract rose 0.61 euro to 80.55 euros a tonne.