Chevron's Wheatstone LNG facility, in Pilbara coast, western Australia, in an undated handout image.CHEVRON/Reuters
Dutch and British gas rose on Friday morning after workers at Chevron’s Australian liquefied natural gas (LNG) facilities started strike action amid an ongoing dispute over wages and working conditions.
The Dutch October contract rose by €4.13 to €34.64 per megawatt hour (MWh) by 0835 GMT, while the November contract gained €1.85 to €45.60/MWh, LSEG Eikon data showed.
In the British market, the October contract was up by 7.50 pence at 86.50 pence per therm.
Workers at Chevron’s CVX-N Gorgon and Wheatstone liquefied natural gas (LNG) projects in Australia went on strike on Friday after talks broke down, potentially disrupting output from facilities that account for over 5 per cent of global supply.
“In response, prices are up this morning … but in a rather moderate way,” analysts at Engie EnergyScan said in their morning note.
“The market is probably thinking that, for the moment, we are just talking about a strike. We have not yet reached the stage of a drop in supply. So, no need to panic in a context where all other fundamentals are rather bearish,” they added.
Gas storage sites in the European Union are filled at 93.5 per cent, higher than typical for the time of year, data from Gas Infrastructure Europe (GIE) showed.
Closer in, the British day-ahead contract was up 4.00 pence at 85.00 p/therm, with the Dutch equivalent was up €1.55 at €33.75/MWh.
Maintenance at some key Norwegian infrastructure has been extended by several days curbing deliveries to Europe and Britain, but supplies should improve going forward.
“The fundamental picture is over all bearish with Norwegian flows expected to return on Monday,” LSEG analyst Timothy Crump said in a morning note.
Flat demand for heating and lower demand for gas from the power sector as wind power generation is expected to pick up, were also bearish, he added.
Peak wind power generation in Britain will rise from 1.7 gigawatts (GW) on Friday to 4.2 GW on Saturday, out of total metered capacity of 23 GW, Elexon data showed.
In the European carbon market, the benchmark contract was up by €0.48 at €83.41 a tonne.