Dutch and British gas prices fell on Tuesday morning on healthy inventories and strong flows of liquefied natural gas (LNG) despite forecast of colder weather that will increase gas demand for heating.
The Dutch December contract was down 1.30 euro at 42.90 euros per megawatt hour (MWh) by 0951 GMT, LSEG data showed. The day-ahead contract was down by 0.65 euro at 43.60 euros/MWh.
The Dutch January contract was down by 0.92 euros at 43.98 euros/MWh.
“Despite a few cold days ahead, strong stock levels and flows including plenty of LNG into December keep confidence levels high,” consultancy Auxilione said in a morning note.
The latest long-term weather forecasts expect temperatures to return to the seasonal normal by the end of the second week of December, but will be much cooler than normal this week, LSEG data showed.
“The latest weather forecast expects further drop in temperatures to come next week, substantially increasing heating demand. The consumption forecast for the day ahead is …indicating an increase of 125 gigawatt hours per day (GWh/d),” LSEG analyst Tomasz Marcin Kowalski said in a morning note.
“We continue to have a robust supply of LNG and record high imports from Norway…. The expected increase in availability of French nuclear capacity this week is also a bearish factor,” he added.
European gas storage inventories remain 97.4% full, a record for the time of year, according to the latest data from Gas Infrastructure Europe.
In Britain, the day-ahead contract TRGBNBPD1 fell by 0.25 pence to 113.50 p/therm, while the within-day contract TRGBNBPWKD shed 1.50 p to 111.50 p/therm.
The British December contract TRGBNBPMc1 was down by 2.68 pence at 110.00 pence per therm.
From tomorrow on, temperatures in the UK are expected to fall significantly below the seasonal average to less than 2 C, LSEG’s Kowalski said.
In the European carbon market, the benchmark contract CFI2Zc1 fell by 1.21 euros to 72.42 euros a metric ton.
Source: Reuters (Reporting by Marwa Rashad, Editing by Susanna Twidale)