Russia Keeps Gas Traders Guessing With No Sign of New Supply

(Bloomberg) -- Europe's natural gas market is awaiting fresh clues on supply from Russia, after the nation opted against booking capacity to ship the fuel to the region through a major pipeline next month.

Gazprom PJSC didn't book pipeline space to ship gas via the Yamal-Europe link on Feb. 1, confirming no flows are expected on Tuesday. Supplies through that route have been halted for the past 42 days, the longest on record.

The absence of bookings leaves traders guessing when supplies from Russia will increase. It also comes amid ongoing regional tensions, and the potential for conflict to interrupt energy flows. War could disrupt the massive volumes of gas that Russia sends to Europe, about a third of which comes through Ukraine.

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Gas has been sent in reverse of its usual direction eastward to Poland, via the Mallnow station in Germany, where the Yamal-Europe link terminates. Gazprom can still use further daily allocations to resume westward shipments through the pipeline -- as it did in December before the Mallnow flow changed course. However, uncertainty over curbed Russian supplies are heightening already volatile prices.

Concern over the situation in Ukraine has helped to push benchmark gas prices higher in recent weeks. Meanwhile, limited supplies from Russia and Europe's dangerously depleted storage levels are adding further bullish impetus. Historically low European gas inventories are expected to remain throughout 2022, according to BloombergNEF.

Increased liquefied natural gas arrivals in Europe and mild weather have eased pressure on prices in recent days. However, in January, Russia's gas shipments through Ukraine have been lower and no extra capacity to ship the fuel was booked at day-ahead auctions on Monday. Gazprom has said it is meeting all contractual obligations to customers and reduced flows are because demand has fallen.