By Nicholas Earl
Gas prices have eased after yesterday’s bumper rally which saw markets surge to their highest levels since June.
Benchmarks have been rattled by geopolitical instability, exacerbating supply shortage concerns this winter, after Israel shut a key production field and Finland launched an investigation into potential sabotage of a key pipeline.
UK Natural Gas Futures climbed nearly 14 per cent in yesterday’s trading to £1.24 per therm – but have pared back five per cent to £1.18 per therm in today’s market as investors await further price signals.
Dutch TTF Futures have also dipped five per cent to €46.95 per megawatt hour after yesterday’s upsurge, which saw prices hit €49.25 per megawatt hour.
This follows Israel suspending production at the Tamar gas field, which is in range of Hamas rockets in Gaza – with conflict escalating in the region.
There are also fresh worries over sabotage in Europe, following a potential attack on a North Sea pipeline.
Officials in Finland and Estonia are now investigating a leak on the Baltic connector gas pipeline between the two countries – which is being considered suspicious.
Prices are also being propped up by the looming threat of further strike action in Australia, with Chevron and unions locked in talks over pay and conditions at two major liquefied natural gas (LNG) facilities in Australia.
While unions confirmed progress have been made in a second round of mediated talks, there remains the threat of fresh industrial action next week.
The two sites – Gorgon and Wheatstone – supply around six per cent of the world’s LNG supplies, which Europe has depended on heavily since Russia’s squeeze on pipelines into the continent.
While Europe has topped up supplies to 97 per cent of capacity, heating season is about to begin with customers ramping up energy usage in the winter months.
