Yves here. This post shows how the French revolt against Macron’s dictatorial raising of retirement ages is already having economic effects beyond France. Admittedly the changes so far are only for the nearest future, so Mr. Market expects the dislocation to be short-lived.
By Charles Kennedy. Originally published at OilPrice
- The front-month future at the TTF hub climbed to $47 on Wednesday morning, rising for the third consecutive day.
- Nationwide strikes in France and expectations of a colder start to April are the driving factors behind the price spike.
- Despite the rise, European natural gas prices are still near a 20-month low and European gas storage is at its highest level for this time of year in a decade.
Europe’s benchmark natural gas prices rose on Wednesday morning for a third consecutive day of gains amid lower LNG supply due to the nationwide strikes in France and expectations of a colder start to April than usual.
The front-month futures at the TTF hub, the benchmark for Europe’s gas trading, traded up by 1.3% at $47 (43.30 euros) per megawatt-hour (MWh) at noon in Amsterdam, while the equivalent UK benchmark contract was up by nearly 1% at the same time in London.
Wednesday’s trade marked the longest streak of gains for European natural gas prices in about a month, according to Bloomberg’s estimates.
Three of France’s four terminals remain shut and will stay shut until at least Thursday as strikes are crippling LNG and crude oil imports, as well as refinery operations. The French strikes against President Emmanuel Macron’s pension reform have entered their fourth week.
France has four LNG receiving terminals, Dunkirk, Montoir, Fos Cavaou, and Fos Tonkin. The terminals at Montoir, Fos Cavaou, and Fos Tonkin, operated by French company Elengy, are currently shut due to the strikes.
Adding to the gas price rise were weather forecasts suggesting that most of Europe will see a colder-than-normal start to April, which could prolong the winter heating season and increase gas demand.
Nevertheless, milder than usual winter overall helped Europe avoid a gas shortage this winter. As of March 27, the EU’s gas storage sites were nearly 56% full, per data from Gas Infrastructure Europe. That’s the highest gas stocks for the end of a winter heating season in a decade, also thanks to demand cuts from industry and households, and a steady inflow of LNG in recent months.
Despite the rise in Europe’s benchmark gas prices, they are now at around a 20-month low. Signs have emerged that industries are switching back to using gas in a tentative sign that European industrial gas demand is rising.