Reduced winds and an updated weather forecast help EU gas prices rise, Gazprom's Ukraine application is 42.4 mcm
MOSCOW. Oct 5 (Interfax) - A slight decline in wind turbine output provided strong support for gas prices in Europe. In addition, the weather forecast for October was again updated and entered within the climatic norm, whereas previously published forecasts showed higher air temperatures.
UKRAINIAN TRANSIT
The Ukrainian GTS Operator (OGTSU) accepted an application from Gazprom for transportation on Thursday of 42.4 mcm, the Ukrainian company said. Wednesday's application was 42.3 mcm. Capacities are declared at one of the two entry points into the country's gas transportation system, the Sudzha gas measuring station. The application for the corridor through the Sokhranovka GIS was not accepted.
The official representative of the monopoly, Sergei Kupriyanov, told reporters that "Gazprom is supplying Russian gas for transit through the territory of Ukraine in the volume confirmed by the Ukrainian side through the Sudzha GIS, 42.4 mcm, on October 5. The application for GIS Sokhranovka was rejected."
OGTSU declared force majeure on accepting gas for transit through Sokhranovka, since it allegedly cannot exercise operational and technological control over the Novopskov compressor station. The route through Sokhranovka can provide transit of over 30 mcm per day. Gazprom believes there are no grounds for force majeure, and there are no obstacles to continuing to operate as before.
EUROPEAN MARKET
Wind generation in Europe fell slightly on Wednesday. A day earlier, wind turbines provided 22% of the region's electricity needs, after 26% on Tuesday, the WindEurope association reports. In October 2022, their contribution was 18% while it was 14% in September.
The spot price of gas in Europe increased 9% on Wednesday, recouping the decline of previous days. The contract for day-ahead delivery at the TTF hub in the Netherlands closed at $361 per tcm.
There is a noticeable gap in LNG prices in Asia compared to Europe. November futures for the JKM Platts index (Japan Korea Marker, reflects the spot market value of cargo delivered to Japan, South Korea, China and Taiwan) is trading at $505; futures for LNG supplied to northwest Europe (LNG North West Europe Marker) are at $419.
RESERVES IN EUROPE
The level of natural gas reserves in Europe has become a key indicator for the global market. The region as a whole continues to pump into storage facilities.
Current inventory levels reached 96.34% - 8 percentage points above the average for the same dates over the past five years, Gas Infrastructure Europe said.
During the gas day on October 3 (a day of record wind generation), reserves increased 0.19 percentage points. The pace is noticeably lower than normal levels over the past five years. Nevertheless, the target storage capacity for the beginning of the sampling season has already been achieved.
European LNG terminals operated at an average capacity of 48% in September; the load has been the same since the beginning of October.
RESERVES IN USA
National reserves in American underground gas storage facilities are becoming increasingly important as the country actively increases exports.
The US continues its pumping season. During the next reporting week, gas reserves will have increased 2.5 bcm, the standard volume for this time of year.
The country's current inventory level is 70%, which is 6 percentage points higher than the average over the past five years, the Energy Information Administration (EIA) reports.