EUROPE GAS-Prices edge higher on strong LNG demand, supply concerns
LONDON, June 25 (Reuters) - Dutch and British wholesale gas prices edged up in early trade on Tuesday, supported by strong competition from Asia for cargos of liquefied natural gas (LNG), while fears over potential supply disruptions also buoyed sentiment.
The benchmark front-month contract at the Dutch TTF hub was up by 0.47 euro at 34.95 euros per megawatt hour (MWh), or $10.98/mmbtu, by 0810 GMT, LSEG data showed.
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The Dutch August contract was up 0.53 euros at 35.38 euros/MWh.
The day-ahead contract in the British market rose 0.95 pence to 82.95 pence per therm.
"Upside risks from strong Asian LNG demand and shut off of remaining Russian pipeline supply risks continue to support TTF," analysts at Morgan Stanley said in a research note.
Earlier this month, Uniper won a $14 billion arbitration against Gazprom about suspended gas deliveries, which treats ongoing payments from other European buyers as assets-for-seizure.
High temperatures and increased demand for energy for cooling has led to stronger demand for LNG from Asia, meaning prices in Europe must rise to attract cargos.
Analysts at ING said cumulative Asian gas imports were up 10% year-on-year for the first five months of 2024.
"This increase has been driven largely by China, the return of price-sensitive buyers, and hot weather in parts of Asia increasing demand for cooling needs," the analysts said.
The European Union also adopted a fresh package of sanctions on Russia on Monday that included transhipments of Russian LNG.
However, traders said this news has had little impact on the market since it will not directly impact European gas supplies.
In the European carbon market, the benchmark contract edged up by 0.04 euro to 67.39 euros per metric ton.
(Reporting By Susanna Twidale; Editing by Rashmi Aich)