European buyers have not yet asked the Russian government to increase gas supplies, news service Tass reported, citing Deputy Prime Minister Alexander Novak.
“The market seems to consider that the renewal of the historical partnership Putin is asking for from Europeans — with a clarification on the role of gas in their energy mix — could take time to materialize to resolve the short-term problem they are facing,” Engie EnergyScan wrote in a report. European gas is also probably getting a boost from rising Asian coal prices, it said.
U.K. within-day contracts rose as much as 11.6% on fears that low wind power generation will tighten gas markets further. The U.K.’s wind power capacity is forecast to drop to 1,384 megawatts at 7 p.m. local time on Friday, its lowest level in more than four weeks. Crimped wind power generation is likely to boost Britain’s emissions and power markets as well as natural gas, consultant Inspired Energy wrote in a note.
But while next-month delivery prices are high, contracts for shipping in 2022 are trading at less than half or one-third, Harry Huang, head of gas, power and derivatives trading at PetroChina International, said at a virtual conference on Thursday. “That perfect storm will pass,” he added.
Persistently high prices are the result of surging liquefied natural gas prices last winter, Melissa Lindsay, founder and CEO of LNG brokerage Emstream, said at the same event. “People’s willingness to pay high prices right now for winter cargoes is because of what they saw last year,” she said.