European natural gas prices rose as Russian supply through a major pipeline remained at the center of traders’ attention despite shipments remaining stable for a second day.
(Bloomberg) — European natural gas prices rose as Russian supply through a major pipeline remained at the center of traders’ attention despite shipments remaining stable for a second day.
Russian shipments via the key Nord Stream pipeline restarted on Thursday and flows are expected to stay at about 40% of its capacity on Friday. Focus is turning to next week, with President Vladimir Putin warning earlier that shipments could decline to 20% of capacity if a turbine that’s stuck in transit isn’t received in time to replace another that’s likely to need maintenance.
The critical component was held up in transit after repairs in Canada and was still in Germany on Thursday. Supply through the biggest pipeline from Russia to the European Union has reverberated through the economy and markets for weeks. Moscow resumed shipments after a 10-day maintenance on the link ended on Thursday, but European officials still aren’t convinced that fuel will keep flowing as the crucial winter months approach.
Europe is pushing ahead with efforts to replenish its gas storage sites over the summer, and the continent needs more Russian flows to meet demand over the winter months. If Moscow continued to send gas at 40% of the pipeline’s capacity and then halted flows in October, Europe would likely run out of fuel some time in April, said Deutsche Bank AG.
Dutch front-month futures, the European benchmark, increased as much as 4.1%, and were 3.3% higher at 160.70 euros per megawatt-hour at 8:36 a.m. in Amsterdam.