Prices inch up on Ukraine gas transit deal expiry
LONDON, Dec 31 (Reuters) - Dutch and British wholesale gas prices inched up on Tuesday morning on expectations for colder weather later this week and as Russian gas supply to Europe via Ukraine was expected to stop.
The benchmark front-month contract at the Dutch TTF hub edged up by 0.38 euro to 48.23 euros per megawatt hour (MWh) by 0913 GMT, according to LSEG data.
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The TTF February contract was up 0.33 euros at 48.55 euros/MWh.
Russia's Gazprom said it will pump a reduced volume of gas to Europe via Ukraine on Tuesday. Flows are expected to fall to zero from the early hours of Jan. 1 after the expiry of the five-year transit agreement between Ukraine and Russia.
Gazprom said it would send 37.2 million cubic metres on Tuesday compared to 42.4 mcm on Monday.
Colder weather is expected in north-west Europe in the later half of this week which could drive up demand for gas for heating.
In Britain, the day-ahead contract rose by 2.95 pence to 120.45 pence per therm, its highest level since Dec. 3.
"Looking ahead to 2025, the LNG market faces potential upside risks despite forecasts of increased supply from the U.S. and Qatar," said MET Group analysts.
"Delays in capacity additions or stronger-than-expected demand from Asia – driven by economic recovery or cold weather – could tighten the market," they said.
Europe’s gas storage buffer could diminish if geopolitical disruptions persist, amplifying volatility. The industry remains on alert for unexpected events that could quickly shift supply-demand balances, they added.
In the European carbon market, the benchmark contract was 0.93 euro higher at 72.91 euros per metric ton.
(Reporting by Nina Chestney)