European gas price again rises above $300 per thousand cm, Gazprom requests 42.4 mcm transit via Ukraine
MOSCOW. March 5 (Interfax) - Gas prices in Europe have again risen above $300 per thousand cubic meters after remaining below that level for almost a month. An unusually mild February has given way to a drop in the temperature in March and so far a more severe weather forecast for the entire month. According to forecasts, the average temperature in March will be 2 degrees lower, and several waves of colder weather are expected.
UKRAINE TRANSIT
Gas Transport System Operator of Ukraine, or GTSOU, has accepted a nomination from Russia's Gazprom today to transport 42.4 million cubic meters of gas through the country, up from 42 mcm on Monday, data from GTSOU show. Capacity was requested only through one of two entry points into Ukraine's Gas Transport System, the Sudzha metering station. A request was not accepted through the Sokhranovka metering station.
"Gazprom is supplying Russian gas for transit through the territory of Ukraine at the volume confirmed by Ukraine via the Sudzha metering station at 42.4 mcm on March 5, with booking via the Sokhranovka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.
GTSOU has declared a force majeure with respect to acceptance of gas for transit through Sokhranovka, claiming that it cannot control the Novopskov compressor station. The route through Sokhranovka had provided transit of more than 30 mcm of gas per day. Gazprom believes that there are no grounds for the force majeure or obstacles to continuing operations as before.
EUROPEAN MARKET
February was very mild, with an average temperature four degrees above the norm and three higher than in February last year. Cloudy and windy weather ensured a lot of electricity was generated by wind plants.
But the air turned cooler at the end of February, supporting gas prices. The preliminary forecast for March is for noticeably colder weather on average than in February.
The spot price for gas in Europe rose 6% on Monday: the day-ahead contract at the TTF gas hub in the Netherlands closed at $305 per thousand cubic meters. The price held below $300 for the previous 24 days, its low being $256.
Wind turbines have generated 18% of Europe's electricity on average since the beginning of March, according to WindEurope data. Wind generation averaged at 19% in March 2023 and 22% in February 2024.
The spread between LNG prices in Asia and those in Europe is noticeable: in Asia, the most expensive futures contract for April on the JKM Platts index is $298 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $265 per thousand cubic meters.
EUROPEAN INVENTORIES
The level of gas storage in Europe is a key indicator for the global market. The region as a whole continues to pump gas into storage.
Europe's underground gas storage facilities are currently 62.1% full, which is 17 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe. Gas storage has again been at its highest since records began in 2011 due to mild weather over the past week.
Inventories fell 0.06 percentage points during the March 3 gas day, a Sunday.
European LNG terminals operated at 50% capacity in February and 57% since the start of March.
U.S. INVENTORIES
Gas inventories in UGS facilities in the United States are of increasing importance for the global market, as the country is boosting gas exports.
Gas withdrawals continue, with storage falling by 2.7 bcm, which is 20% more than usual for the time of year.
The current level of inventories is 49%, which is 12 percentage points above the five-year average, according to the U.S. Energy Department's Energy Information Administration.