British and Dutch wholesale gas prices fell on Tuesday on milder weather, plentiful supply and lower oil and coal prices, with the agreement on an EU gas price cap having little immediate impact on trading.

The British day-ahead contract fell by 21 pence to 225 p/therm by 1032 GMT, according to Refinitiv Eikon data.

The British within-day contract was down 31 pence at 210 p/therm. In the Dutch TTF market, the day-ahead contract was down 3.25 euros at 103 euros per megawatt hour (MWh).

Prices were down on an overall bearish picture with healthy supply and storages and no new cold spell on the horizon, Refinitiv analyst Marina Tsygankova said in a morning note.

Heating demand in Europe is set to drop for Wednesday, but seen up slightly in Britain, according to Refinitiv.

European gas storages were last seen 83.82% full, according to Gas Infrastructure Europe.

Further out, the Dutch benchmark contract for January TRNLTTFMc1 fell by 2.30 euros to 14.70 euros per megawatt hour (MWh)- its lowest level since Nov. 14.

European Union energy ministers on Monday finally agreed a gas price cap, to be triggered at 180 euros/MWh and also dependent on a 35 euro price difference to global prices of liquefied natural gas (LNG).

“We see less of an impact now given that the price cap is so much higher than the current price levels,” Sindre Knutsson, head of energy markets at analysis firm Rystad Energy, said.

Mild weather forecasts were the more likely driver for lower prices, he added.

Analysts at Engie EnergyScan said TTF prices had been correcting on the back of bearish coal and oil prices and improving European gas fundamentals.

“But, at such levels, they would drop below Asia JKM prices, with the risk of reducing LNG supply to Europe… unless Asian buyers lower their bids,” they added.

In the European carbon market, the benchmark contract CFI2Zc1 was up 2.28 euros at 89.61 euros a tonne.
Source: Reuters (Reporting by Nora Buli in OSLO; editing by Nina Chestney)