MARKET INSIGHT - Euro Prices Up

摘要

The dollar or so rise in contract gas prices to Europe since Oct. 1 - to an estimated $12.11 per million Btu for Russian gas into Germany from $11.11 last month - was not unexpected, as term prices remain largely if not always fully oil-indexed. Without partial spot-indexation, the price would have reached $12.54 this month, up from $11.47. But the increase comes in the face of several recent bearish signals. Europe had a mild early autumn, with sluggish gas sales, and major importers still lagging on take-or-pay offtakes. The first leg of Russia's 27.5 billion cubic meter per year (2.66 billion cubic foot per day) Nord Stream pipe to Germany is due to start flowing on Nov. 8, according to Gazprom Chief Executive Alexei Miller. Although Gazprom has no reason to swamp the market, that's what happened in September 2006, when the Norway-to-UK Langeled pipe started up, so traders are watchful (WGI Oct.3'06,p1).