April 17 - Dutch and British wholesale gas prices eased on Wednesday morning but were still near their highest levels since January, as the market kept a close eye on potential supply disruptions of liquefied natural gas (LNG).
The benchmark front-month contract at the Dutch TTF hub eased by 0.38 euro to 32.90 euros per megawatt hour (MWh) by 0849 GMT.
It had opened at 33.87 euros/MWh, its highest level since Jan. 5, following strong gains on Tuesday.
The renewed threat to supplies from the rising tensions in the Middle East was the key driver for rising gas prices globally over the past week, Daniel Hynes, senior commodity strategist at ANZ Bank said in a daily report.
"Traders were keen to snap up any available cargoes amid the threat to LNG tankers traversing the Strait of Hormuz," he said.
The Strait of Hormuz is a key choke point for deliveries from Qatar and the United Arab Emirates, supplying 11.7% of Europe's and 24.4% of Asia's LNG imports, according to analysis firm Rystad Energy.
Iran's Revolutionary Guards seized a container ship in the strait on April 13 days after Tehran vowed to retaliate for a suspected Israeli strike on its consulate in Damascus on April 1. Iran had said it could close the crucial shipping route.
A wider conflict affecting trade flows through the Strait of Hormuz could result in 82.4 million tonnes or 112 billion cubic metres of LNG being removed from the global, senior Rystad analyst Lu Ming Pang said in a note.
"In the unlikely event this happens, prices could exceed $100 per mmBtu in an already tight market caused by the ongoing Russia-Ukraine conflict," Pang said, up from current levels equating to just below $11/million British thermal units (mmBtu).
European prices last traded at an equivalent of $100/mmBtu in Aug. 2022 during the European energy crisis following Russia's invasion of Ukraine.
An increase in global gas and LNG prices this month has been due to rising demand by Japan, supply outages in the United States and and some disruptions to Norwegian pipeline supply to Europe, Pang said.
In the British market, the day-ahead price eased by 1.25 pence to 82.50 pence per therm, while the intraday contract was up 1.05 pence at 83.55 p/therm.
In Norway, an outage at the key Nyhamna processing plant ended, and while other outages continue to subdue flows on Wednesday, they should improve on Thursday, LSEG analyst Tomasz Marcin Kowalski said.
In the European carbon market, the benchmark contract was down 0.57 euros at 73.05 euros per metric ton. (Reporting by Nora Buli in OSLO; Editing by Nina Chestney)