Europe’s benchmark gas contract hit its lowest for 18 months as liquefied natural gas (LNG) tankers continue to head to Europe while milder, windier weather is forecast for next week.
The front-month contract at the Dutch TTF hub TRNLTTFMc1 a European benchmark, was down by 1.80 euros at 45.70 euros per megawatt hour (MWh) by 0956 GMT, Refinitiv Eikon data showed.
It earlier touched 45.65 euros/MWh for its lowest since August 2021.
“A flurry of new LNG cargoes scheduled to arrive in northwest European terminals … is expected to further ensure stable LNG supply,” Refinitiv analyst Yuriy Onyshkiv said in a morning report.
Milder temperatures next week are also a bearish factor on prices.
Refinitiv data shows temperatures in the UK and northwest Europe are expetced to rise by 0.5-1 degree Celsius over March 6-15.
A milder westerly flow pattern is forecast to bring windy, wet and mild weather towards the end of the next week and the week after, though a cooler scenario towards the end of March is still realistic, said Refinitiv meteorologist Georg Mueller.
“For now, it appears that strong supply and storage fundamentals are countering cold weather forecasts,” said Rystad Energy analyst Nikoline Bromander.
Gas is also trading towards the upper end of the coal-to-gas switching band, which could prioritise gas burn in Europe’s power sector and limit further downside movement on the TTF, she added.
In Britain, the within-day contract TRGBNBPWKD was down 1.10 pence at 124 per therm.
Europe’s gas stores are 60.62% full, the latest data from Gas Infrastructure Europe showed.
The benchmark contract CFI2Zc1 in the European carbon market fell by 0.97 euros to 92.41 euros a tonne after posting the biggest one-day loss since early January on Thursday.
The margins from power generation from gas continue to be more profitable than those for coal-fired generation, supporting the switch to the less carbon intensive fuel, Refinitiv analyst Tatiana Suarez said.
Source: Reuters (Reporting by Nora Buli in Oslo Editing by David Goodman)