British and Dutch wholesale gas prices mostly fell on Monday as mild weather, full gas storage tanks and plentiful liquefied natural gas (LNG) tanker arrivals are curbing short-term supply concerns.
The benchmark front-month Dutch contract was down 8.75 euros at 133 euros per megawatt hour (MWh) by 0922 GMT, the lowest level since late June.
The Dutch contract for the first quarter of 2023 , typically the coldest period of the year with highest demand, was down 8.80 euros at 156.70 euros/MWh.
The British front-month contract fell by 17.50 pence to 240 pence per therm.
The mild weather outlook was the main driver at present, analysts said.
The remainder of October will be milder with temperatures above normal but partly unsettled conditions with occasional rain, Refinitiv meteorologist Georg Mueller said.
“Storages are brimming full and LNG still lining up, hence we could head into oversupply,” an analyst with a European industrial said, adding he expected further bearishness.
European storages are almost 92% full, exceeding European pre-winter targets, data from Gas Infrastructure Europe showed.
However, reports that Chinese local utilities have been asked to stop diverting LNG cargoes to Europe could limit the downside, the analyst added.
Closer in, the Dutch day-ahead contract was down 4 euros at 63 euros/MWh – it’s lowest level since the end of October 2021.
In the UK, the day-ahead contract was the only contract bucking the downward trend, trading up by 11.50 pence at 105 pence/therm.
Gas demand for heating and power production will rise on Tuesday, Refinitiv analysis showed.
In the UK, the gas system was 11.7 million cubic metres (mcm) over-supplied, according to National Grid data.
Peak wind generation was forecast to fall from 15.5 gigawatts (GW) today to 7.9 GW on Tuesday, out of total metered capacity of around 20 GW, Elexon data showed.
In the European carbon market, the benchmark contract was 0.87 euro lower at 67.15 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Shailesh Kuber)