British and Dutch gas prices eased on Friday ahead of the Christmas holidays and as weather forecasts indicated milder temperatures will persist into January.
The benchmark front-month contract TRNLTTFMc1 at the Dutch TTF hub was down 0.72 euro at 33.90 euros per megawatt hour (MWh) by 0933 GMT, LSEG data showed.
The February contract TRNLTTFMc2 fell 0.52 euro to 34.13 euros per megawatt hour (MWh).
In Britain, the front month TRGBNBPMc1 fell by 1.25 pence to 84.25 pence per therm.
“The worst of last year’s energy crisis has passed,” analysts Bjarne Schieldrop and Ole Hvalbye at SEB commodity research said in a gas market update report on Friday, highlighting an “impressive” market adaption.
In addition, a mild weather forecast until February reduced gas demand for heating and from the power sector, they added, and revised their 2024 price forecast down by 12.50 euros to 40 euros/MWh.
This was higher than current levels, reflecting an expectation of increasing bids for liquefied natural gas (LNG) from China and a comeback in EU demand, which could see gas inventories in Europe move back to normal levels, they said.
Meanwhile, there was minimal disruption to European gas supply from some energy shipment suspensions in the Red Sea, analysts at Energy Aspects said in a weekly report.
In fact, it could have the opposite effect if Suez-bound U.S. LNG cargoes were to unload in Europe, they added.
Further in, the British day-ahead gas contract TRGBNBPD1 applying for Dec. 27 fell by 1.00 pence to 73.50 pence per therm.
“Windy weather continues to dominate in the UK, heavily curbing gas for power demand,” LSEG analyst Marina Tsygankova said in her morning note, adding strong winds are forecast to persist over the Christmas holiday.
However, a brief dip in temperatures for the last days this month should see a slight lift to heating demand, she added.
In Britain, peak wind power generation was forecast at 18.2 gigawatts (GW) on Friday, out of the total metered capacity of about 23 GW, Elexon data showed.
In the European carbon market, the benchmark contract CFI2Zc1 gained 0.52 euros to 78.40 euros a metric ton.
Source: Reuters (Reporting by Nora Buli; Editing by Devika Syamnath)