Dutch and British wholesale gas prices edged lower on Wednesday, as ample supply offset the impact of forecasts that hot weather next week will increase power sector demand and concern of possible disruption as tensions flare in the Middle East.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 eased 0.54 euro to 36.27 euros per megawatt hour (MWh), or around $11.57/mmBtu, by 0829 GMT, LSEG data showed.

The British front-month contract TRGBNPMc1 was down 1.25 pence at 88.75 pence per therm.

“On the gas market, we also saw a recovery yesterday, with the most traded contracts on the market once again approaching year-high levels,” analysts at Energi Danmark said in their morning report.

Prices had fallen in line with a wider global market rout on Monday.

High temperatures forecast in Southern and Central Europe could lift gas demand and are supportive for prices, Energi Danmark’s analysts said, but added supply was ample.

Norwegian gas nominations to Europe remain stable at around 344 million cubic metres (mcm) per day, according to infrastructure operator Gassco.

European gas storages were last seen 86.3% full, in line with levels a year ago, and already close to their 90% target for Nov. 1, Gas Infrastructure Europe data showed.

Supply risks remain given the tension in the Middle East between Hezbollah and Israel, Daniel Hynes, commodities strategist at ANZ bank said in a note.

Short-term, stronger wind speeds on Thursday will ease demand for gas in the power sector, LSEG analyst Yuriy Onyshkiv said.

The British day-ahead contract TRGBNPD1 was down 1.25 pence at 79.00 pence per therm.

The Dutch equivalent TRNLTTFD1 was down 0.40 euro at 35.65 euros/MWh.

In the European carbon market CFI2Zc1, the benchmark contract eased 0.24 euro to 69.72 euros per metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Barbara Lewis)