Dutch and British wholesale gas prices fell on Friday morning amid forecasts for mild and windy weather next week and as higher prices compared to Asia resulted in more liquefied natural gas (LNG) flowing to Europe.
The benchmark front-month contract at the Dutch TTF hub (TRNLTTFMc1) was down 1.60 euros at 43.70 euros per megawatt hour (MWh), or $13.19 /mmBtu, by 0931 GMT, LSEG data showed.
The Dutch March contract (TRNLTTFMc2) was down 1.54 euros at 43.76 euros/MWh.
Further in, the Dutch day-ahead price (TRNLTTFD1) was down 1.10 euros at 44.40 euros/MWh, while its British equivalent (TRGBNBPD1) was down 4.70 pence at 111.30 pence per therm.
Prices are retreating from 14-month highs seen at the start of the year amid milder weather from next week, stronger flows of LNG to Europe and a slower rate of gas being taken out of storage sites, a trader said.
Temperatures in north-west Europe are set to plunge at the weekend, but climb to around or above normal levels from Wednesday, forecasts showed.
The TTF front-month could break below support at 44-43 euros/MWh and British front at 106-109 p/therm if temperature forecasts improve over the longer term, the trader added.
For now, higher prices in Europe compared to Asia mean that Europe should be a more attractive market for LNG, analysts at ING said in a morning note.
Some LNG tankers initially headed to Asia have changed course for Europe, LSEG ship-tracking data showed.
Meanwhile, Europe’s gas storages sites are 68.24% full, data from Gas Infrastructure Europe showed.
Analysts at Energy Aspects said they project Europe stocks to hit around 40 billion cubic metres (bcm), or 37% full, by end-March, down 23.2 bcm year-on-year.
Some of that tightening stemmed from the 4.1 bcm y/y loss of Russian pipeline gas this quarter and a 4.4 bcm y/y increase in demand largely on weather normalisation, they added.
The last two winters have been unusually warm.
In the European carbon market (CFI2Zc1), the benchmark contract was down 0.75 euro at 72.71 euros a metric ton.
Source: Reuters