British and Dutch gas prices fell on Wednesday morning, weighed down by improving flows of Norwegian gas, strong supply of liquefied natural gas (LNG) and mild weather forecasts.

The British contract for day-ahead delivery was down by 13.50 pence to 176.50 pence per therm, while the March contract was down 20 pence at 180.00 pence per therm by 1007 GMT.

The Dutch contract for February delivery fell by 7.5 euros to 72.50 euros per megawatt hour (MWh).

“We expect falling prices today, as the weather forecasts for Northern and Central Europe are mild, while the supply picture is improving amid high LNG imports,” analysts at Energi Danmark said in a morning note.

Send-out of LNG from European terminals in the UK, the Netherlands, Belgium, France, Italy and the Iberian Peninsula has averaged 3,880 gigawatt hours per day in January, the highest monthly average since 2017, Refinitiv Eikon data showed.

“Temperatures will be close to seasonable values but will start to increase on Sunday,” Refinitiv meteorologist Georg Mueller said.

“The week after next week could bring a change to a westerly flow weather pattern with unsettled, windy and mild weather but it is too early for details,” he added.

A rebound in Norwegian supply could also exert downward pressure, analysts at Engie EnergyScan said in a note.

Total Norwegian exports were nominated 57 million cubic metres (mcm) per day higher on Wednesday amid lower maintenance-related outages, Refinitiv analysts said.

The British system was over-supplied on Wednesday, with demand of 312 million cubic metres (mcm) and supply of 318.0 mcm, National Grid data showed.

Meanwhile, flows of Russian gas remain low, with the Polish section of the Yamal-Europe pipeline still in reverse and muted flows through Ukraine.

In other markets, the European benchmark December 2022 emissions contract was down by 1.44 euro at 81.23 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo, Editing by Susanna Twidale)