Dutch and British wholesale gas prices fell on Wednesday morning amid profit taking after reaching a fresh two-year high on Tuesday.
The benchmark front-month contract at the Dutch TTF hub (TRNLTTFMc1) was 1.35 euro lower at at 55.10 euros per megawatt hour (MWh) by 1307 GMT, according to LSEG data.
The Dutch April contract (TRNLTTFMc2) was down 2.48 euros at 55.12 euros/MWh.
In Britain, the front-month contract (TRGBNBPMc1) fell by 4.54 pence to 134.41 pence per therm.
Forecasts have been revised upwards slightly for average temperatures in north-west Europe from the weekend and there is some profit taking after prices reached two-year highs earlier this week, a gas trader said.
LSEG data shows a slight adjustment upwards in temperatures from Feb. 15-21.
Europe’s gas and energy trading industries have urged the European Union not to cap gas prices in this month’s package of support for industry in a letter to the European Commission.
A senior EU official told Reuters the idea was not being considered.
Gas prices reached their highest since February 2023 this week.
Analysts at BNP Paribas said recent gains were overdone.
“We believe the market is pricing in a scenario where the European winter turns out worse than expected while the APAC (Asia-Pacific) summer turns out to be as inelastic as in 2024,” BNP Paribas analysts said in a research note.
“We think both suppositions are wrong and hence don’t see a fundamental justification for current prices,” the analysts added.
Due to a draw on stocks, Europe will have to attract incremental liquefied natural gas (LNG) imports this year to manage gas storage to comfortable levels ahead of the next winter, analysts at Goldman Sachs said in a note this week.
“As a result, we revise our north-west European LNG imports higher by 8% (14 million cubic metres/day) through end-summer, which we estimate will leave end-March storage at 31% full and end-October storage at 86% full,” they said.
Ukraine will increase gas imports by a third on Wednesday to 22.6 mcm/day after Russian missile attacks on Ukrainian gas production facilities earlier this week, data provided by the operator of gas transmission system showed.
In the European carbon market (CFI2Zc1) the benchmark contract was 1.43 euro lower at 81.16 euros per metric ton.
Source: Reuters