Dutch and British wholesale gas prices rebounded on Thursday amid technical buying and as strong demand supported the market.

The benchmark front-month contract at the Dutch TTF hub (TRNLTTFMc1) was up 2.00 euros at 43.40 euros per megawatt hour (MWh), or $13.33 /mmBtu, by 0909 GMT, according to LSEG data.

The front-month contract hit a 10-week low of 40.85 euros/MWh on Wednesday on expectations of warmer weather and expectations the European Commission could soften targets for countries to store gas ahead of winter.

The Dutch April contract (TRNLTTFMc2) was up 1.95 euros at 43.65 euros/MWh.

In the British market, the day-ahead contract (TRGBNBPD1) was up 5.44 pence at 105.49p/therm.

“Our today’s outlook for TTF DA (day-ahead) is for some of the last two days of large decline to be retraced,” LSEG analyst Wayne Bryan said in a daily research note.

“On the bullish side, there is a ramp up in LDZ (local distribution zone) demand on day-ahead,” he said.

LDZ demand, which is primarily used for heating, was forecast up 237 gigawatt hours a day for Friday, LSEG data showed.

“The first signals today point towards a correction after the previous sharp losses,” analysts at Energi Danmark said in a daily research note.

One trader said prices have also been buoyed by some technical buying after price decline over the past few days left the market looking over-sold.

The relative strength index (RSI) of the Dutch-front month contract almost touched 30 late on Wednesday afternoon, according to LSEG data, a technical threshold indicating that a stock or commodity may be due for an upward correction.

In the European carbon market (CFI2Zc1), the benchmark contract was up 0.78 euro at 71.81 euros a metric ton.
Source: Reuters