Spot price for gas in Europe tops $400 per thousand cubic meters; Gazprom requests 40.1 mcm transit via Ukraine
MOSCOW. Oct 9 (Interfax) - The spot price for gas in Europe rose above $400 per thousand cubic meters on Monday morning due mainly to a drop in wind power generation on Sunday. Only light winds are forecast for Monday also, which will support the price of gas.
UKRAINE TRANSIT
Gas Transport System Operator of Ukraine, or GTSOU, has accepted a nomination from Russia's Gazprom today to transport 40.1 million cubic meters of gas through the country, compared with 40.3 mcm on Sunday, 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 40.1 mcm on October 9, 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
Wind power generation in Europe halved on Sunday from its Saturday high: wind turbines generated 14% of Europe's electricity on October 8, according to WindEurope data. Wind generation averaged at 18% in October 2022 and 14% in September 2023.
The spot price for gas in Europe rose 15% on Friday: the day-ahead contract at the TTF gas hub in the Netherlands closed at $351 per thousand cubic meters. The spot price rose to $403 on Monday morning with the drop in wind generation.
The spread between LNG prices in Asia and those in Europe is marked: in Asia, the most expensive futures contract for November on the JKM Platts index is $502 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $419 per thousand cubic meters.
EUROPEAN INVENTORIES
The level gas storage in Europe is a key indicator for the global market. The region as a whole continues to pump gas into storage.
Current inventory levels in Europe's underground gas storage facilities are 96.87%, which is 8 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.
Inventories inched up 0.17 percentage point during the October 7 gas day, a Saturday. Injection rates are markedly below the five-year average, but the target level had nevertheless been reached by the start of the gas withdrawal season.
European LNG terminals operated at 48% capacity in September and 48% since the start of October also.
U.S. INVENTORIES
Gas inventories in UGS facilities in the United States are of increasing importance for the global market, as the country is actively increasing gas exports.
The U.S. gas injection season continues. Inventories increased by 2.4 billion cubic meters for the latest reporting week, which is almost the norm for this time of year.
The current level of inventories is 72%, which is 5 percentage points above the five-year average, according to the U.S. Energy Department's Energy Information Administration.