Dutch and British wholesale gas prices fell on Monday morning, ending last week’s rally sparked by geopolitical tensions and cold weather, as healthy storage levels and strong flows of liquefied natural gas (LNG) eased supply concerns.
The Dutch November gas contract fell by 2.95 euros to 52.45 euros per megawatt hour (MWh) by 0852 GMT, according to LSEG data.
The December contract was down 0.64 euro at 53.56 euros/MWh. In Britain, the day-ahead contract fell by 10.00 pence to 128.00 p/therm.
“Looking at the fundamentals on the Continent, we see an overall weaker demand side than last Friday. Our LDZ (local distribution zone) consumption forecasts have adjusted significantly lower with the heating demand forecast being now mostly below normal,” LSEG analyst Ulrich Weber said in a morning note.
North-west Europe is experiencing lower temperatures that could last through the weekend. The rest of October and the beginning of November are forecast to be warmer.
“The cold temperatures can be felt and frost was seen this morning which is expected to pass by the end of the week and seasonal normal temperatures will be maintained for the foreseeable future,” consultancy Auxilione said.
Unions at Chevron’s LNG facilities in Australia reaffirmed their plan to resume strikes this week as mediated talks continued on Monday.
Supply fears have grown as Israel instructed operator Chevron to halt natural gas exports through a major subsea pipeline between Israel and Egypt.
Damage to the Balticconnector gas pipeline has also raised fears over the security of Europe’s energy infrastructure sites after the Finnish Prime Minister said it could have been done deliberately.
Although European storage inventories are at record levels and gas demand is 15-20% below levels before the war in Ukraine, the European gas market remains tight into 2024-25 until the next wave of supply hits the market in 2025-26, according to consultancy Timera Energy.
In the European carbon market, the benchmark contract fell by 1.86 euros to 84.09 euros a tonne.
Source: Reuters (Reporting by Marwa Rashad; editing by Nina Chestney)