Dutch and British gas prices extended losses on Wednesday on continued mild forecasts limiting demand, full storage tanks and hopes that the Israel-Hamas conflict will not escalate further across the Middle East.
The Dutch December contract, the new front-month benchmark, was down 2.70 euros at 48.10 euros per megawatt hour (MWh) by 0949 GMT. The January contract slipped 0.33 euro to 49.50 euros/MWh.
“Mild weather forecasts, filled storages across Europe and hopes that the war in the Middle East will not escalate any further than it already has led to a noticeable price drop on the European gas market,” Energi Danmark analysts said in a note.
There is some hope of a de-escalation of the Israel-Hamas conflict on news that a deal brokered by Qatar would allow limited evacuations from besieged Gaza into Egypt.
Europe’s gas storage sites remain near full, at 99.24% of capacity, according to the latest Gas Infrastructure Europe data.
Further in, the Dutch day-ahead contract was up 0.03 euros at 40.70 euros/MWh, with demand set to increase slightly on Thursday after a public holiday in much of continental Europe today.
The British day-ahead contract dropped by 2.50 pence to 99.50 pence/therm.
The British market was oversupplied on Wednesday morning, while more gas would flow into the onshore systems in Britain and continental Europe from liquefied natural gas (LNG) terminals, LSEG analyst Saku Jussila said.
This would likely see storage levels swell further still, while demand should remain muted with latest weather forecasts showing milder temperatures for the end of November and first half of December, the analyst added.
Strong winds in the coming days will also curb demand for gas from power stations.
Peak wind power generation in Britain was forecast at 15.8 gigawatts (GW) on Wednesday, rising to 16.3 GW on Thursday, Elexon data showed.
In the European carbon market, the benchmark contract rose 0.32 euros to 79.37 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Susanna Twidale)