Dutch and British wholesale gas prices hit a three-month low on Wednesday morning as weather forecasts remain milder or in line with the seasonal norm amid a comfortable supply situation.
The contract for January at the Dutch TTF hub eased by 0.20 euros to 34.65 euros per megawatt hour (MWh) by 0906 GMT, LSEG data showed.
Earlier, it hit 34.40 euros/MWh, marking its lowest level since Sept. 19.
The British front-month contract dropped by 0.40 pence to 86.75 pence per therm after hitting its lowest point since Sept. 8 at 86.55 p/therm intraday on Tuesday.
The British day-ahead price eased by 0.50 pence to 84.00 p/therm.
“While gas stocks have higher than average fill rates around this time of the year, low industrial activity in Europe is causing lower gas demand,” Hans van Cleef, head of energy research and strategy at Publieke Zaken, said in a report.
European gas storage inventories were last seen at 90.4% full, almost 2 percentage points higher than a year ago but slightly below 2019 levels, according to latest data from Gas Infrastructure Europe.
Supply remains healthy amid steady arrivals of liquefied natural gas (LNG) tankers in Europe and pipeline flows from Norway.
“Norwegian pipeline supplies to Europe have remained a benchmark 300 million cubic meters per day since the beginning of November,” Lu Ming Pang, senior analyst at Rystad Energy, said in a note.
Meanwhile, the analyst noted that the inflection point for declining TTF prices before reversing to increase for winter 2024/2025 has shifted from May to September in the past week.
“This may reflect market sentiment on end users being well stocked entering and exiting this winter, limiting activity for spot purchases and restocking,” Pang said.
Temperatures for northwest Europe are forecast milder or around normal for December, LSEG data showed.
The weaker gas prices were also in line with a drop in coal and oil prices, Engie EnergyScan’s analysts said.
In the European carbon market, the benchmark contract inched up by 0.49 euro to 68.70 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo;Editing by Dhanya Ann Thoppil)