Dutch and British wholesale gas prices were rangebound on Wednesday morning as maintenance outages in Norway eased and supply rebounds.
The benchmark front-month contract at the Dutch TTF hub inched up by 0.21 euro to 33.76 euros per megawatt hour (MWh) by 0917 GMT, while the July contract edged up by 0.01 euro to 33.89 euros/MWh, according to LSEG data.
In the British market, the June contract was 0.08 pence higher at 80.85 pence per therm.
“There isn’t a clear direction at the moment. Norwegian supply is healthier but demand isn’t that strong,” a gas trader said.
Outages in Norway have eased since their peak and the outages planned from June 4 should have only a negligible impact on prices, analysts at LSEG said.
In Britain, wind power output is forecast to increase to around 11 gigawatts (GW) on May 31 before falling back to normal levels. Solar generation is also increasing and could peak on June 1 and then remain above normal levels until at least June 11, LSEG data showed.
Peak wind generation in Britain is forecast at 9 GW on Wednesday and 13 GW on Thursday, out of total metered capacity of around 23 GW, Elexon data showed.
Higher renewables output typically reduces demand for gas for power plants.
In north-west Europe, a drop in wind speeds is forecast to below normal until June 1 and solar generation is impacted by cloud cover and expected to be below normal levels until at least June 4.
“While there have been concerns over Russian pipeline flows to Austria, maintenance in Norway and strong Asian LNG demand, the storage situation remains very comfortable,” said analysts at ING.
European storage levels are more than 69% full, according to Gas Infrastructure Europe data. That is above the five-year average of 56%.
“We still expect storage to be close to 100% full ahead of next winter. In the absence of any significant supply shocks, prices still have room to move lower,” ING analysts added.
In the European carbon market, the benchmark contract CFI2Zc1 edged up by 0.09 euro to 74.67 euros per metric ton.
Source: Reuters (Reporting by Nina Chestney)