Dutch and British wholesale gas prices were little changed on Wednesday morning, trading in a tight range, amid strong storage inventories and mild weather but geopolitical tensions continue to keep the market nervous.

The benchmark front-month contract TRNLTTFMc1 at the Dutch TTF hub was flat at 38.60 euros per megawatt hour (MWh), or $12.60 per mmBtu, by 0900 GMT, LSEG data showed.

The December contract TRNLTTFMc2 rose by 0.15 euros to 39.40 euros/MWh.

The British day-ahead price was 0.35 pence lower at 94.00 pence per therm, while the British front-month contract TRGBNBPMc1 was down 0.83 pence at 96.35 p/therm.

LSEG analyst Wayne Bryan said geopolitical risk remains the biggest uncertainty will continue to provide volatility in the market despite fundamentals pointing firmly downwards in the short term.

The supply side remains strong with continued injections pushing gas storage levels to the brim, LNG continuing to head towards the UK and Europe in the weeks ahead. Temperature outlooks remaining close to seasonal normals keeping demand in check, consultancy Auxilione said in a daily note.

“With no key driver to push markets in either direction, they remain idly nervous and continue to keep an eye on global geopolitical developments which remains a significant risk,” Auxilione added.

The Middle East has been on edge awaiting Israel’s response to a missile attack from Iran last week that Tehran carried out in retaliation for Israel’s military escalation in Lebanon. The Iranian attack ultimately killed no one in Israel and Washington called it ineffective.

U.S. President Joe Biden is expected to speak on Wednesday with Israeli Prime Minister Benjamin Netanyahu, talks set to include discussion of any plans to strike Iran, according to a person familiar with the matter.

In the European carbon market, the benchmark EU carbon permit contract CFI2Zc1 rose 1.59 euro to 61.92 euros per metric ton.
Source: Reuters (Reporting by Marwa Rashad; Editing by Susanna Twidale)