Gazprom doubles gas transit via Ukraine: VTBC
Russia's Gazprom has doubled gas transit volumes via Ukraine since the start of the month, resulting in a drop in European gas prices, VTB Capital (VTBC) said in a research note on February 8.
Gazprom slashed gas deliveries to Europe drastically in January, although European gas prices remained low compared with heights reached in late December, thanks to relatively warm weather and increased LNG imports.
The average TTF spot price was down 13.7% week on week at $928/'000 m3 in February 1-7, VTBC said, while gas storage facilities in the EU and the UK are now less than 36% full, according to data published by Gas Infrastructure Europe. VTBC notes that this compares with a 53% historical average for the time of year.
"The company continued to fulfil its contractual obligations to European customers, and is likely to increase deliveries later this year as the majority of contracts are take-or-pay and have limited flexibility in gas delivery fluctuations during a certain time period (e.g. quarter)," VTBC's head of oil and gas research Dmitry Loukashov said.
VTBC noted that Asian prices were trading at an average $1.82/mn Btu discount to European prices last week. Asian prices typically have a premium to European prices.