Dutch gas prices remained near 2-year lows on Monday as warmer weather curtailed demand while supply remained plentiful.
The Dutch front-month contract was 1.42 euros lower at 32.98 euros per megawatt hour (MWh) by 0838 GMT, after earlier trading at 32 euros/MWh, its lowest since late June 2021, Refinitiv Eikon data showed.
“The outlook for mild and windy weather and especially the decreasing willingness to source imports at a premium price seem to be bearish elements at play,” Norbert Ruecker, head of economic and next generation research at Swiss bank Julius Baer, said in a note.
European buyers are now offering less of a premium to source natural gas from global markets, with amply filled storage meaning there is little need for immediate purchases as the next winter heating season is still months away, he added.
Europe’s gas storage sites are 63.3% full, latest data from Gas Infrastructure Europe showed.
The weather is set to turn warmer from the middle of this week, according to Refinitiv meteorologist Georg Mueller.
“Energy supplies have improved markedly and panic buying, herding, and hoarding behaviour, which framed last year’s turmoil, fully disappeared,” Ruecker said.
The analyst highlighted growth of liquefied natural gas (LNG) exports, a surge in coal mining, a partial revamp of nuclear power especially in Asia, and substantial growth in clean energy installations as key factors.
“We stick to our bearish views for the time being and see further downside in the longer term,” Ruecker added.
Reports over the weekend that the G7 and EU are looking to ban the import of gas via pipelines that Russia has already halted should neither change flows nor the fundamental outlook for the market, analysts at ING Research said in a note.
The Dutch day-ahead contract was down 1 euro at 32.50 euros/MWh.
The British day-ahead gas price was 0.25 pence lower at 75.25 pence per therm and the within-day contract 4 pence lower at 75 pence/therm.
The British gas system was 9.6 million cubic meters (mcm) over-supplied, National Gas data showed.
In the European carbon market, the benchmark contract CFI2Zc1 was up 0.18 euro to 88.66 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Kirsten Donovan)