Dutch and British wholesale gas prices edged lower on Wednesday, after rising the day before, as stronger wind generation offset lower solar output and supply was stable.

The benchmark Dutch front-month contract at the TTF hub (TRNLTTFMc1) inched down by 0.20 euro at 35.80 euros per megawatt hour (MWh) by 0747 GMT, LSEG data showed.

The British front-month contract (TRGBNBPMc1) was 0.61 pence lower at 83.29 pence per therm.

Total Norwegian exports are flat but gas processing plant Kollsnes and the Troll field will start another maintenance outage with a combined impact of 40 million cubic metres per day from tomorrow.

In north-west Europe, temperatures are expected to move up towards normal levels by the end of the week and next week is expected to be warmer than normal, LSEG data showed.

Wind generation is forecast above normal levels util next week, offsetting below normal solar output. Stronger wind output typically lowers demand for gas from power plants.

Analysts at BNP Paribas said winter gas prices in Europe and the United States are under-valued as the markets will be tighter than currently priced in.

“We believe November 1 EU gas stocks will be below the current target level which transfers price risk to next winter,” they said.

“The EU gas market is not yet long enough, despite significant LNG supply growth, to have both summer and winter prices decline significantly,” they added.

In the European carbon market, the benchmark contract (CFI2Zc1) edged up by 0.06 euro to 72.66 euros a metric ton.
Source: Reuters