European gas market shrugs off weekend of major Russian turbulence

The European gas market on June 26 shrugged off any concerns triggered by the weekend's events in Russia, despite heightened geopolitical risk following the short-lived mutiny by the Wagner Group.

The benchmark TTF month-ahead price rose by 7% to almost Eur37/MWh in early trading June 26, but had fallen back to Eur33.50/MWh by 1030 GMT, close to the market open price.

Platts, part of S&P Global Commodity Insights, assessed the TTF month-ahead price at Eur33/MWh on June 23.

Some market watchers had expected an additional risk premium to be added to the TTF following the events in Russia, but the immediate impact was muted.

Russian pipeline flows to Europe via Ukraine also continued as normal. Gas entering Ukraine at the Sudzha interconnection point on June 25 was nominated at 41 million cu m/d, according to data from Ukraine's grid operator GTSOU.

That is in line with recent flows at Sudzha, and supplies were nominated for June 26 again at 41 million cu m/d, the data showed.

Russia also continues to deliver gas into Europe via the TurkStream link and associated onshore infrastructure in Bulgaria and Serbia.

However, the role of Russian pipeline gas is now much diminished, as its impact on the market.

Russian pipeline gas deliveries historically represented around 45%-50% of the EU's gas imports before the invasion of Ukraine in February 2022, but by March this year the figure had dropped to 8%, according to the European Commission.

Russian LNG from the Novatek-operated Yamal LNG plant is also delivered into the EU, with supplies reaching 7.7 million mt so far in 2023, according to S&P Global data.

Coal and carbon prices were also little changed June 26, after an initial flurry of activity in the carbon market.

A slight slip in the ICE Rotterdam front-year coal contract was not seen as unusual for the start of a trading week, with product seen at $113.40/mt.

In spot product, Platts assessed CIF ARA 6,000 kcal/kg NAR coal at $116/mt June 26, down $3.50/mt on the day. FOB Richards Bay 5,500 kcal/kg NAR coal was at $82.50/mt, up 90 cents on the day, while Asian coal prices were also seen relatively stable.

At Eur86.20/mtCO2 mid-afternoon, EU carbon allowances (nearest December) on the ICE exchange had dropped back June 26 after a brief surge in the morning saw contracts spike to Eur89.61/mtCO2.