Prices soar on Finland pipeline development, Mideast tensions
LONDON, Oct 10 (Reuters) - Dutch and British wholesale gas prices extended their rally on Tuesday afternoon after Finnish authorities said damage to a subsea gas pipeline might have been deliberate and as Middle East violence raised supply concerns.
The Dutch November contract last traded at 49.25 euros ($52.23) per megawatt hour (MWh), up 6.25 euros from Tuesday's last trade after touching its highest level in almost seven months, LSEG data showed.
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The December contract was 4.80 euros higher at 51.60 euros/MWh.
The British day-ahead contract last traded at 110.90 pence per therm, up 15.90 p. The British November contract was up 16.80 pence at 123.50 p/therm.
Finnish President Sauli Niinisto said on Tuesday afternoon damage to a gas pipeline and the communication cable connecting the country with Estonia could have been done deliberately.
"It is too early to draw conclusions on who or what caused the damage," he told a press conference.
The Balticconnector link was shut early on Sunday on concerns that gas was leaking from a hole in the 77-km (48-mile) pipeline. Finnish operator Gasgrid said it could take months or more to repair if a leak is confirmed.
Prices were already up on Tuesday morning on supply concerns fueled by violence in the Middle East and colder weather forecasts.
Traders noted Chevron had been instructed by Israel's energy ministry to shut down the Tamar natural gas field off the country's northern coast.
The field produced 4.91 billion cubic metres (bcm) in the first half of 2023. In 2022 it accounted for 10.2 bcm of Israel's total gas production of 21.9 bcm. Israel exported 9.2 bcm of gas to Jordan and Egypt, according to data from Engie's EnergyScan.
In Australia, Chevron and unions representing workers at its two liquefied natural gas (LNG) facilities are scheduled to meet for talks on Wednesday after the company asked the industrial arbitrator to help reach a deal as workers threaten to restart strikes.
Temperatures in Britain and north-west Europe are expected to drop later this week which could raise demand for heating, while wind speeds are expected to be variable, LSEG data showed.
In the European carbon market, the benchmark contract rose 2.99 euros to 84.74 euros a tonne. ($1 = 0.9438 euros) (Reporting by Marwa Rashad and Susanna Twidale; editing by Jason Neely, Sharon Singleton and Richard Chang)