British and Dutch wholesale gas prices mostly fell on Thursday for the second straight session on softer demand and high wind power output, but the start of withdrawal season could offer some support.
The benchmark December contract on the Dutch TTF hub fell by 9.25 euros to 106.75 euros per megawatt hour (MWh) by 1003 GMT, according to Refinitiv Eikon data.
The January contract was down 8.10 euros at 113 euros/MWh.
“Consumption isn’t up to speed yet and thus prices need to hover or drop below 100 to push switching from other sources to gas, especially as power is so low due to renewable and nuclear production,” a European gas trader said.
Strong arrivals of liquefied natural gas (LNG) is also keeping prices lower, with around 45 LNG-laden ships in the EU region.
However, Engie’s EnergyScan analysts said that prices would find support now that the storage withdrawal season is on and there are still risk factors on the supply side.
European gas storage sites, currently above 95% full, showed the first signs of decline this week, indicating the start of the net withdrawal season, which could lend support to prices going forward.
A cold weather forecast is also expected to raise demand for heating for the day ahead.
Eastbound gas flows through the Yamal-Europe pipeline to Poland from Germany rose on Thursday morning, while Russian supplies to Europe via Ukraine inched up.
In the British gas market, the contract for immediate delivery TRGBNBPWKD fell by 5 pence to 85 pence per therm, while the December contract TRGBNBPMc1 dropped 6 pence to 252 p/therm, Refinitiv Eikon data showed.
Britain’s gas system was around 1.5 million cubic metres (mcm) over-supplied on Thursday, with supply forecast at 265.8 mcm and demand at around 264.3 mcm, National Grid data showed.
Peak wind generation in the UK is forecast at 14.7 gigawatts (GW) on Thursday and 13.8 GW on Wednesday, Elexon data showed. Strong wind power output curbs demand from gas-fired power plants.
In the European carbon market, the benchmark contract CFI2Zc1 was up 0.03 euros at 73.46 euros a tonne.
Source: Reuters (Reporting by Marwa Rashad; Editing by Devika Syamnath)