EUROPE GAS-Prices ease from six-month highs on profit taking

Dutch and British forward wholesale gas prices fell on Friday morning amid profit taking, after scaling their highest levels since March the day before. The Dutch contract for October delivery, was down 5.85 euros at 309.65 euros per megawatt-hour (MWh) by 0943 GMT, while the November price was 6.02 euros lower at 312.68 euros/MWh.

The British September contract was down 26.00 pence at 555.00 pence per therm. ” are down this morning, probably on profit taking,” analysts at Engie EnergyScan said in a morning note.

A trader said trading was very volatile and marked by low liquidity, agreeing some participants were likely to lock in profits from this week’s rally ahead of a bank holiday weekend in Britain, when markets are closed on Monday. “There is no anchor point price-wise at these levels,” he added, in reference to gas prices hitting near-record highs this week.

Norbert Rücker, head of Economics and Next Generation Research at investment bank Julius Baer said: “The ferocity of price moves suggests that extreme fear and panic are at play, which has rarely been an element that influenced prices lastingly, i.e. over months.” All eyes were on the upcoming three-day outage at the Nord Stream 1 pipeline, with a concern that it may not return.

Gazprom will halt natural gas supplies to Europe via the Nord Stream 1 pipeline for three days from Aug. 31 to Sep. 2, piling pressure on the region as it seeks to refuel ahead of winter. Europe’s gas storage sites were just over 78% full, Gas Infrastructure Europe data showed, getting close to a European Commission target of 80% by Oct. 1.

Meanwhile, Norwegian supply should fall to its lowest levels this year in September on a heavy maintenance schedule. The trader said there were sufficient flows to cover day-to-day demand and the outages were not a real concern, however.

“September is not a big demand month either,” he added. In Britain, the contract for immediate delivery was up by 10.00 pence at 540.00 pence per therm, but the contract for weekend delivery fell by 27 p to 510 p/therm.

The UK system was marginally short on Friday, according to data from National Grid. In the European carbon market, the benchmark contract inched up by 0.59 euro to 89.90 euros a tonne.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)