British and European wholesale gas prices fell on Thursday on strong LNG arrivals and as market players cover their positions ahead of a long Easter holiday running from Friday through Monday amid geopolitical uncertainty.
In the British gas market, the contract for immediate delivery fell 24.00 pence to 175.00 pence per therm by 0825 GMT, while the contract for weekend delivery was down 21.00 pence at 162.00 p/therm.
The Dutch benchmark front month contract fell 3.50 euros to 100.50 euros per megawatt hour (MWh), while the contract for next day delivery was down 6.0 euros at 99.45 euros/MWh.
“Flows are coming in heavily into Europe, demand isn’t there now to support higher prices even though the risk premium might mean prices should be higher, so market is bearish today,” a European gas trader said.
He added that an expected cut of Russian gas supply for some countries after deadline for rouble payment expires and an increase in the U.S. gas prices could push prices back up in the coming weeks.
Strong LNG arrivals into the UK and Northwest Europe and a wide discount to TTF prices shall keep exports at capacity and facilitating further injections into storage, Refinitiv analysts said.
Britain’s gas system was oversupplied by 18 million cubic metres (mcm) on Thursday with demand forecast at around 282 mcm and flows at 300 mcm.
In Britain, peak wind generation is forecast at 2.07 gigawatts (GW) on Thursday, but is expected to rise to 4.4 GW on Friday, Elexon data showed.
Reversed Russian gas flows along the Yamal-Europe pipeline dropped on Thursday while nominations for deliveries to Slovakia via Ukraine were higher. Flows to Germany through the Nord Stream 1 pipeline across the Baltic Sea were steady.
Russian state-owned gas producer Gazprom GAZP.MM said it continued to supply natural gas to Europe via Ukraine in line with European consumers’ requests, which increased on Thursday.
In the European carbon market, the benchmark contract was 1.2 euros up at 78.35 euros a tonne.
Source: Reuters (Reporting by Nina Chestney; editing by David Evans)