EUROPE GAS-Prices trade sideways after Qatar LNG attack

LONDON, March 20 - Benchmark Dutch wholesale gas prices traded sideways on Friday morning, after touching their highest level since January 2023 in the previous session, as some European nations and Japan offered to join efforts to secure safe passage for ships through the Strait of Hormuz.

The benchmark Dutch front-month contract at the TTF hub TFMBMc1 were trading around 61.88 euros per megawatt hour (MWh) by 0841 GMT, having fallen to an intra-day low of 58.69 euros in early trade, ICE data showed.

The British front-month contract NGLNMc1 edged up by around 0.87 pence to 157.51pence per therm.

Prices surged on Thursday, touching their highest level since January 2023, after QatarEnergy said missiles struck LNG facilities at the Ras Laffan complex, causing extensive damage.

QatarEnergy's chief executive told Reuters the attacks have knocked out 17% of the country's export capacity for three to five years.

"What matters now is not only the volume lost but the precedent set. Once critical Gulf energy infrastructure is seen as vulnerable, buyers will price that risk for longer than the initial outage itself," said Jan-Eric Fahnrich, senior analyst, gas & LNG research at Rystad Energy.

Qatar's North Field LNG expansion is likely to also be delayed due to more pressure for labour and material.

"This is likely to at least delay the onset of a possible period of oversupply. However, claims that this ends any possibility of oversupply in the early 2030s might be premature as significant expansion volumes from North America are still expected and additional final investment decisions could be triggered," he added.

Overnight, there were no major attacks on more gas infrastructure.

In a joint statement on Thursday, Britain, France, Germany, Italy, the Netherlands and Japan said they could contribute to "appropriate efforts" to ensure safe passage through the Strait of Hormuz.

Meanwhile, U.S. President Donald Trump said he told Israeli Prime Minister Benjamin Netanyahu not to repeat attacks on Iranian energy infrastructure.

On Friday, technical levels point towards downward pressure for prices.

The 14-day Relative Strength Index is near 74 and the Average Directional Index, which measures trends strength, is 39, showing the contract is overbought and likely to face downward pressure, said Yuriy Onyshkiv, LSEG gas analyst.

Temperature and wind generation forecasts are little changed and supply remains healthy.

In the European carbon market, the benchmark contract CFI2Zc1 rose by 5.24 euros to 68.89 euros per metric ton.

On Thursday, European Commission President Ursula von der Leyen that end said she had told leaders of Commission plans for an ETS "investment booster" to finance decarbonisation projects with a budget of 30 billion euros ($34.72 billion) financed by ETS allowances.

She did not specify from where the allowances would come and over what timeframe, though her comments implied an average sale figure of 75 euros/tonne — well above current spot EUA price, said LSEG carbon analyst Luyue Tan.