Dutch and British wholesale gas prices mostly fell on Friday after mild and windy weather curbed demand for gas, although colder temperatures ahead and concerns of delays to shipments of liquefied natural gas (LNG) limited losses.
The benchmark front-month contract at the Dutch TTF hub was flat at 27.55 euros per megawatt hour (MWh) by 1053 GMT, after initially trading lower, LSEG data showed.
In Britain, the front-month contract fell by 0.75 pence to 67.70 pence per therm after also trading lower earlier in the day.
Mild and windy weather forecasts reduced demand for gas for heating and for power generation, analysts at Engie EnergyScan said in a note.
The weather has also reduced withdrawals, which touched multi-year seasonal lows this week, from European gas storage sites, they added.
Europe’s gas stores are ample at 73% full, Gas Infrastructure Europe data showed.
A return to colder temperatures from the end of next week is still expected to stop prices from dropping below 25 euro/MWh, LSEG analysts said in their weekly report.
Meanwhile, the British day-ahead contract was down 1.15 pence at 66.20 p/therm, while the Dutch equivalent TRNLTTFD1 was up 0.55 euros at 27.45 euros/MWh.
The market continues to monitor potential LNG cargo diversions or cancellations, which have little impact on prices so far.
Qatar, one of the world’s largest LNG exporters, has notified several European utilities of cargo delays as ships avoid the Red Sea because of attacks from Iranian-backed Houthi militants.
Global gas demand is forecast to grow by 2.5%, or 100 billion cubic metres (bcm) in 2024, the International Energy Agency (IEA) said in its Q1 24 Gas Market Report.
In Europe, natural gas demand is forecast to grow by 3%, driven by higher gas use in the residential and commercial sector, assuming the return to average weather after last year’s relatively mild winter, the IEA said.
“Gas use in industry is forecast to continue its recovery, although fragile and largely dependent on the evolution of prices,” it added.
In the European carbon market, the benchmark contract CFI2Zc1 rose by 0.52 euros to 63.77 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Barbara Lewis)