Dutch and British wholesale gas prices declined slightly on Friday morning amid stable supply and weak demand.

The benchmark Dutch front-month contract at the TTF hub (TRNLTTFMc1) inched down by 0.17 euro to 35.30 euros per megawatt hour (MWh) by 0814 GMT, while the day-ahead contract (TRNLTTFD1) was 0.20 euro lower at 34.45 euros/MWh.

The British day-ahead contract (TRGBNBPD1) was down 1.50 pence at 82.70 pence per therm.

TTF prices have been trading in a range of around 32-35 euros since late June. Supply remains stable from Norway and liquefied natural gas, while demand has been declining.

Europe and Britain will experience a heatwave over the next few days and average temperatures are forecast to remain above normal for the next couple of weeks, LSEG data showed.

Wind generation is forecast to fall below normal levels from Sunday and remain there until at least July 23, except for a few days from July 15-17, it also showed.

“Some upward pressure is emerging from rising temperatures in Asia, particularly in Japan and South Korea, where cooling demand is increasing,” said Wayne Bryan, head of European gas research at LSEG.

There are also some concerns over gas storage refilling rates in Germany after a storage auction for the Rehden site failed to attract any bids, he added.

Analysts at Energy Aspects said the main upside risk to prices in the coming weeks will be from cooling demand, with temperatures already higher than the norm in the first half of July.

“TTF Aug-25 could increase by another 2.50–3.00 euros/MWh if heatwave conditions persist through August,” they said.

In the European carbon market, the benchmark contract (CFI2Zc1) was down by 1.02 euro to 69.72 euros a metric ton.
Source: Reuters