LONDON (Reuters) by Ekaterina Kravtsova – Changing gas price dynamics caused by an influx of liquefied natural gas (LNG) to Europe have played into Russian producer Gazprom’s hands and enabled it to increase pipeline flows to the continent so far this year. Gazprom is moving determinedly with spot gas sales in Europe due to a near-fivefold spike in U.S. LNG sales to the continent in October to January compared with a year earlier. But sales within Gazprom long-term contracts are also rising. In January, Gazprom gas flows to Europe totaled 17.6 billion cubic meters (bcm), an almost 0.5 bcm rise from the same month a year earlier, Gazprom data shows. One reason for the rise is a change in time spreads on European wholesale gas contracts, which is enabling some traders to increase purchases in long-term deals with Gazprom or through spot auctions by the company. This trend shows how LNG, which has flooded Europe since October, is reshaping gas prices and flows in the continent, with traders still adjusting to the new market environment. “LNG has really changed the situation,” a gas trader said. “We have to write new textbooks.” A jump in LNG supplies contributed significantly to oversupply… continue reading
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Source: CTRM Center