By KYIV. Nov 9 (Interfax-Ukraine) – The approaching winter is erasing the price anomaly on spot contracts for gas on the European market, with spot prices having been over 50% lower than futures contracts for a month ahead and beyond.
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 Tuesday, 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 delayed, yet unavoidable, seasonal drop in temperatures has restored gas prices on the European market. The day-ahead contract for Wednesday at the TTF hub in the Netherlands closed at $935 per thousand cubic meters, which is more than double the price of $225 per thousand cubic meters a week ago. The December futures contract on the TTF index currently costs $1,230 per thousand cubic meters.
Wind turbines have generated 24% of the EU’s electricity on average this week following 18% on average last week, according to data from WindEurope.
The Nord Stream pipeline has been fully shut down owing to a number of sanctions-related problems regarding equipment maintenance. At the end of September, two lines of Nord Stream 1 and one line of Nord Stream 2 erupted near the Danish island of Bornholm.
Europe is just about to begin net offtake of winter gas reserves, and injection has been only tenths of a percentage point over the past few days.
The beginning of offtake season this year will be the latest since Gas Infrastructure Europe began monitoring in 2011, with the previous latest date coming on November 4, 2013.
Inventories in UGS facilities are currently 95.35%, up 0.04 percentage points from November 7, the last reporting date, according to Gas Infrastructure Europe data. Over 102 bcm of active gas have accumulated in UGS facilities in absolute terms.
Gazprom has also warned 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."
In response to the lower temperatures, European LNG-receiving terminals have boosted regasification volumes, and the capacity-utilization factor has been 65% since the beginning of November against an average of 60% in October.
The U.S. dramatically increased the rate of injecting gas into storage facilities during the last reporting week. In the week ending October 28, three billion cubic meters of gas had been accumulated, which was double the previous week, and overall again in line with the average injection rate this autumn.
Nevertheless, the current level of inventory is below 73%, which is substantially lower than inventory at UGS facilities in Europe and in Russia.
UGS inventories in the U.S. are now 11% above the five-year minimum, according to the U.S. Energy Department’s Energy Information Administration. Current inventory now lags 4% behind the five-year average.
