Dutch and British gas wholesale prices edged lower on Wednesday morning as weather forecasts turned milder for the second half of January, while supply remained strong.

The benchmark front-month contract at the Dutch TTF hub was down 0.56 euro at 30.53 euros per megawatt hour (MWh) by 0923 GMT, LSEG data showed.

The March contract fell by 0.30 euro to 30.80 euros/MWh.

In Britain, the day-ahead contract fell by 1.00 pence to 77.50 pence per therm.

Temperatures in north-west Europe and Britain are expected to rise towards more normal levels for the time of year from the second half of January following a cold snap, LSEG data showed.

Meanwhile, LNG supply and pipeline supply from Norway are expected to remain strong.

“To cope with the cold snap, the Dutch government has allowed production from the giant Groningen gas field to resume for two days starting 9 January. Although the volumes are low, this is an additional element which helps to fuel the bearish feeling,” analysts at Engie EnergyScan said in a daily research note.

The Dutch government on Monday said it would turn on the “pilot light” – meaning minimal production – at two stations in the large Groningen gas field, due to impending cold temperatures in the Netherlands.

High gas storage levels also contributed to downwards pressure on prices. Europe’s gas storage sites are over 83% full, the latest data from Gas Infrastructure Europe showed.

“Apart from heating requirements, demand for gas is currently weak. This applies in particular to industry, which is in recession. The weak data on industrial production in Germany confirms this,” said analysts at Commerzbank.

In the European carbon market, the benchmark contract CFI2Zc1 slipped 1.10 euros to 70.84 euros a metric ton.
Source: Reuters (Reporting By Susanna Twidale; editing by Nina Chestney)