British and Dutch wholesale gas prices fell on Wednesday morning, following a rise the previous session, as traders took profits while the start of withdrawals from European inventories provided some support.
The Dutch day-ahead contract fell by 4.25 euros to 111.75 euros per megawatt hour (MWh) by 0928 GMT, according to Refinitiv Eikon data.
The benchmark December contract was down 3.90 euros at 119.60 euros/MWh.
“Prices are weakening this morning, probably on profit taking,” Engie EnergyScan analysts said.
European gas storage sites, currently above 95% full, showed the first signs of decline this week indicating the start of the net withdrawal season.
Europe’s gas inventories kept building in November thanks to a combination of mild weather and an influx of liquefied natural gas (LNG) cargoes.
“In this context, prices could remain for now in the upper part of their trading range (i.e. above the 5-day average),” Engie EnergyScan analysts said.
Eastbound gas flows on the Yamal-Europe pipeline to Poland from Germany were steady on Wednesday, while Russian supplies to Europe via Ukraine inched lower, pipeline operator data showed.
Annual maintenance at the Interconnector UK (IUK) gas pipeline connecting Britain with Belgium is also underway, with no flows in either directions expected until 30 November.
In the British gas market the day-ahead contract fell by 11 pence to 95 pence per therm, while the within-day contract dropped 3.50 pence to 100 p/therm, Refinitiv Eikon data showed.
Britain’s gas system was around 1 million cubic metres (mcm) over-supplied on Wednesday, with supply forecast at 263 mcm and demand at around 262 mcm, National Grid data showed.
Peak wind generation in the UK is forecast at 12.3 gigawatts (GW) on Wednesday and 13.3 GW on Thursday, Elexon data showed. Strong wind power output curbs demand from gas-fired power plants.
In the European carbon market, the benchmark contract was down 0.75 euros at 75.90 euros a tonne.
Source: Reuters (Reporting by Bozorgmehr Sharafedin Editing by Susanna Twidale)