British and Dutch wholesale gas prices fell on Tuesday morning, with milder temperatures expected in the short term and healthy supply due from several arrivals of liquefied natural gas (LNG) tankers this month.

The British contract for day-ahead delivery TRGBNBPD1 was down 7.95 pence at 1.98 pounds per therm by 0944 GMT.

The Dutch wholesale day-ahead contract TRNLTTFD1 was down 1.3 euros at 82.90 euros per megawatt hour (MWh).

Britain’s gas market was forecast to be oversupplied on Tuesday, with demand at 310 million cubic metres (mcm)/day and supply at 333 mcm/d, data from National Grid showed, with milder temperatures than previously expected curbing demand.

Average temperatures in Britain were forecast at 7.7 degrees Celsius for Tuesday, falling to 4.2C on Wednesday, Refinitiv Eikon data showed.

The forecasts were 0.3C and 0.5C higher respectively than previously.

British and Dutch front-month contracts both fell on the expectation of high supplies of LNG as prices cooled in Asia, making Europe a more attractive destination for cargos.

“The drop in Asia JKM (LNG) prices is depriving European prices of the rebound we expected,” analysts at Engie EnergyScan said in a morning note.

More than 20 LNG tankers are scheduled to unload in northwest Europe in January. LNG/TKUK

The British February contract TRGBNBPMG2 was down 10.10 pence at 1.978 pounds/therm. The Dutch equivalent TRNLTTFMc1 fell by 1.87 euros to 83.13 euros/MWh.

“The outlook for strong LNG sendout should continue to mitigate worries around curbed Russian supply and record weak storage inventory,” analysts at Refinitiv said in a daily research note.

Flows of Russian gas on the Polish section of the Yamal-Europe pipeline remain in reverse going eastward and supplies on another pipeline route via Ukraine also consistently low.

In other markets, the European benchmark December 2022 emission allowance (EUA) contract CFI2Zc1 rose 2.28 euros to 82.34 euros a tonne.
Source: Reuters (Reporting By Susanna Twidale; editing by Nina Chestney)