By KYIV. Nov 3 (Interfax-Ukraine) – The end of the unseasonably warm weather in Europe has normalized the market, with spot gas prices doubling in just one day of trading, as futures contracts worldwide have grown.
Gazprom’s request for pumping Russian gas through Ukraine has not changed markedly from the previous days and months.
The Gas Transmission System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 42.4 million cubic meters of gas through the country, as on Wednesday, data from GTSOU show.
Capacity was requested only through one of two entry points into Ukraine’s Gas Transmission System, the Sudzha metering station. A request was not accepted through the Sokhranivka metering station.
The belated yet inevitable drop in temperatures in Europe has restored gas prices on the European market.
Nearly all European countries have filled their storage facilities either to the standard of 80% or to the maximum level. European liquefied natural gas terminals are operating at 59% capacity to start November against an average of 60% capacity in October, according to data from Gas Infrastructure Europe.
Owing to the chilly temperatures to start November, the spot price for gas in Europe – the day-ahead contract at the TTF hub in the Netherlands – has doubled to $496 per thousand cubic meters from $225 per thousand cubic meters the previous day, with the December TTF futures contract rising to $1,381 per thousand cubic meters, and the February contract increasing to $1,453 per thousand cubic meters.
In Asia, the most expensive winter futures contract for February on the JKM Platts index is now $1,142 per thousand cubic meters on the heels of European prices.
Wind turbines have generated 21% of the EU’s electricity on average this week following 18% on average last week, according to data from WindEurope.
The Nord Stream pipeline is completely shut down due to problems with equipment maintenance caused by sanctions. In addition, last week two strings of Nord Stream 1 and one of Nord Stream 2 depressurized near the Danish island of Bornholm.
Europe continues to inject gas into underground gas storage facilities, with the average level of reserves reaching the targeted 80% at the end of August, since when the pace of injection has slowed, and there could be a transition to net offtake any day now.
Inventories in UGS facilities have risen to 94.95%, up 0.18 percentage points from October 31, the last reporting date, according to Gas Infrastructure Europe data. Over 102 bcm of active gas have accumulated in UGS facilities in absolute terms.
Gas inventories in UGS facilities currently exceed 80% in Austria, Belgium, Bulgaria, Hungary, the Czech Republic, Croatia, Denmark, France, Germany, Italy, the Netherlands, Poland, Portugal, and Spain.
Gazprom has also warns that, "the load on UGS facilities in Europe will be higher than in previous years owing to the changed logistics and sources of gas supplies to the European market."
Gas stocks at the Incukalns UGS facility in Latvia are the lowest in the EU and are stuck at 57%. This UGS facility is responsible for reserve gas supplies to Estonia, Latvia and Lithuania, as well as Finland.
The injection rate into U.S. UGS facilities dropped over 50% for the latest reporting week, as on October 21, for the third consecutive week, with less than 1.5 billion cubic meters injected, which was the lowest figure in the last ten weeks. The average for the previous five weeks was 3.2 bcm, from 2.9 to 3.7 bcm.
U.S. gas companies have ramped up off-season injection owing to the end of the air conditioning period and the scheduled maintenance shutdown at the Cove Point LNG plant. However, there will likely be decreasingly less available gas to replenish reserves because of rising exports and gas consumption domestically.
The current inventory level is below 71%, which is substantially below inventory at UGS facilities in Europe, and in Russia, which has over 90%.
UGS inventories in the U.S. are now 9.2% above the five-year minimum, according to the U.S. Energy Department’s Energy Information Administration. Current inventory lags 5.5% behind the five-year average.
Analysts at Rystad Energy have separately expressed concern regarding the situation in the eastern region of the United States, including Pennsylvania, West Virginia, and Ohio. The summer was exceptionally warm, and injection was less than in previous years. The region will have to increase imports of expensive LNG in order to balance the market.
