Prices remain near annual highs on sanction fears, lower stock levels
LONDON, Nov 22 (Reuters) -Dutch and British wholesale prices hovered near annual highs on Friday as fresh U.S. sanctions on Russia's Gazprombank raised fears over remaining gas supplies from Russia and as cold temperatures led to drawdowns in European gas stores.
The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was down 0.15 euro at 48.45 euros per megawatt hour (MWh), or $14.81/mmbtu, by 0910 GMT, having touched a fresh one-year high of 48.90 euros/MWh in earlier trade.
In Britain, the front-month contract TRGBNBPMc1 rose 0.13 pence to 121.22 p/therm, also close to the intraday yearly high of 121.48 p/therm reached on Thursday.
The United States imposed new sanctions on Russia's Gazprombank on Thursday, one of Russia's largest banks, partially owned by gas company Gazprom GAZP.MM.
“This is significant as in recent years Russia imposed new processes to only allow payments for Russian gas in Rubles. With European players utilising Gazprombank to convert currency to settle in local currency. With that process now under threat, this could be problematic” analysts at consultancy Auxilione said.
Traders said the move has added to concerns over existing supplies of gas from Russia, with thetransit deal between Russia and Ukraine to allow gas flows to Europe, due to expire at the end of the year.
Gas demand has also risen amid cooler temperatures in Europe, leading to a withdrawal in stock levels. The International Energy Agency (IEA) said EU gas storage withdrawals have surged to more than 5 billion cubic metres from Nov. 1-18.
“Ensuring ample gas storage for later this winter is important to mitigate market risks, with a potential halt to Russian gas transit via Ukraine looming,” Fatih Birol, IEA's executive director, said in a post on X.
Europe’s gas stores are 89.4% full, latest data from Gas Infrastructure Europe showed.
In the European carbon market CFI2Zc1, the benchmark contract fell 0.28 euro to 69.71 euros a metric ton.
EXPLAINER-Is it the end for Russian gas supplies to Europe via Ukraine? nL8N3JZ0H0
EXPLAINER-What happens if Russian gas transit via Ukraine stops? nL8N3JV0SH
Reporting By Susanna Twidale; Editing by Sonia Cheema
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