Most energy prices moved upwards on Tuesday amid reports of an extraordinary attack on the militant group Hezbollah in Lebanon, executed by the near simultaneous detonation of embedded explosives in thousands of pagers. At least nine people died, including one child, and thousands were injured, many critically.
The attack has been blamed on Israel – the only obvious suspect in the minds of many commentators – but Israel has yet to comment and is not expected to.
The United Nations described the attack as an extremely concerning escalation in the Middle East and called for calm.
European natural gas prices reversed their sharp falls on Monday, which took prices to their lowest levels since July.
In continental Europe, TTF was up 4.1%, from USD 11.12/MMBtu on Monday to USD 11.58/MMBtu, and was fluctuating around that level on Wednesday morning.
In the UK, NBP was up 4.5%, from USD 10.37/MMBtu to USD 11.21/MMBtu.
The attacks on Hezbollah reportedly occurred at around 15:30 Beirut time (UTC 12:30) so during the middle of the trading day in London.
It is not possible to say how much of an influence the events in Lebanon exerted on prices, but the rises came amid bearish market fundamentals.
Pipeline gas flows from Norway continue to ramp up after a period of planned maintenance – ahead of the winter heating season – and storage facilities in the EU are now 93.41% full, according to data from Gas infrastructure Europe.
In Asia, the November JKM contract – now the front month after the expiry of the October contract on Friday – rose by 1.3% to USD 13.30/MMBtu. The TTF-JKM spread narrowed by 14% to USD 1.72/MMBtu.
Oil prices continued their recovery of recent days after weeks of decline, ahead of today’s meeting of the US Federal Reserve.
The Federal Open Market Committee is expected to raise interest rates by a least a quarter of a percentage point, and possibly a half, to help ward off a recession in a weakening US economy.
Brent crude was up another 1.3% to USD 73.70/barrel while WTI rose by 1.6% to USD 71.19/barrel.
US gas prices were a notable exception to the general upwards trend, with the October Henry Hub contract falling by 2.1% to USD 2.32/MMBtu.
European coal and carbon prices moved upwards with gas. API2 coal rose by 1.8% to USD 4.59/MMBtu while EU carbon dioxide emissions allowances were up 1.8% to EUR 63.80/tonne.
WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.
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