The European benchmark gas price hit its lowest in 21 months on Wednesday amid healthy supply and lower demand because of milder, windier weather.

The Dutch TTF front-month contract was down 1.65 euros at 36.70 euros per megawatt hour (MWh) by 0835 GMT, Refinitiv Eikon data showed, for its lowest since late July 2021.

The Dutch July contract fell by 1.09 euros to 37.37 euros/MWh.

“Supply is abundant, with storage sites across the continent now 60% full, with prospects of reaching 100% before the winter. We expect further losses in Wednesday’s trading,” Energi Danmark analysts said in a morning note.

Europe’s gas storage sites are 60.2% full, the latest data from Gas Infrastructure Europe showed.

Rising wind power output and milder weather is also limiting demand for gas to be used in power generation and heating.

In Britain, gas demand for power was expected at 53 million cubic metres (mcm) on Wednesday, falling to 31 mcm on Thursday, Refinitiv Eikon data showed.

The forecasts were 10 mcm and 12 mcm lower respectively than previous estimates.

British peak wind power generation was expected at 10 gigawatts (GW) on Wednesday, rising to 15.5GW on Thursday, Elexon data showed.

The British day-ahead contract fell by 3.3 pence to 83 pence per therm, while the contract for next week fell by 7.5 pence to 84 pence/therm, Refinitiv Eikon data showed.

“The bearish pressure might be also supported by a solid supply of LNG and Norwegian imports regardless of maintenance work on gas infrastructure,” Refinitiv analyst Tomasz Marcin Kowalski said in a daily research note.

In the European carbon market, the benchmark contract CFI2Zc1 eased by 0.26 euros to 88.15 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo Editing by David Goodman)