Europe starts new gas year with fall in prices
MOSCOW. Oct 10 (Interfax) - The European gas market met the new gas year, which began on October 1, with a general drop in prices last week.
Analysts attribute the falling prices to unusually hot weather in Europe amid the completion of gas being placed in storage and dissipation of fears about LNG supplies.
Prices hit rock bottom last Monday when gas was at $220 per 1,000 cubic meters on the British NBP trading floor, $230 on the Dutch TTF and $217 on the French PEG Nord. The collapse affected trading on Austria's Baumgarten, which is isolated from LNG resources, and prices slumped to $320 last Wednesday.
The prices have since corrected somewhat: NBP closed the week at $282, TTF - $331; Baumgarten closed at $339 on Monday. Prices remain considerably lower than Gazprom long-term contracts, which topped $450 in August.
Exports of Russian gas remain at modest levels, comparable only with summer supply levels. Average daily exports to countries outside the CIS were down 13%, or 46 million cubic meters, year-on-year, in the first eight days of October 2011 (307 million cubic meters).
Despite an overall downward trend, Italy has imported maximum levels of Russian gas since the start of the month, while imports of gas from Algeria have been slashed almost in half from the usual. This shows that Gazprom's main markets in Northern Europe are importing very low volumes.
Hot weather in Europe and mild weather in Russia is forcing Gazprom to lower production in contrast to a many-year seasonal trend. Gazprom reduced production by October 8 2011 to 1.217 billion cubic meters from a seasonal high of 1.26 billion cubic meters on September 28.