Dutch and British wholesale gas prices fell on Thursday as mild temperatures and high wind curb demand in the power sector and storages remain well-filled, but tensions in the Middle East are likely to keep the market volatile.

The Dutch November gas contract fell by 1.89 euro to 47.51 euros per megawatt hour (MWh) by 0902 GMT, according to LSEG data.
The contract rose as high as 51.65 euros/MWh on Wednesday, driven by fears of an escalation of Middle East tensions, but eased by the end of the day.

In the British market, the November contract fell by 3.00 pence to 118.25 pence per therm.

“We expect volatility to remain high today where the market opens with falling prices due to milder weather forecasts for parts of Europe,” analysts at Energi Danmark said in their morning report.

Mild temperatures, coupled with windy and rainy conditions will dominate until the end of October, LSEG meteorologist Marcin Gorski said.

Further in, the British day-ahead contract was down 6.60 pence at 102.50 pence per therm, while the within-day contract fell by 6.25 pence to 103.10 pence/therm.

The Dutch day-ahead contract down 2.60 euros at 44.50 euros/MWh.

Above average temperatures, strong wind power generation and full gas storages all painted a soft fundamental picture, a trader said, who also doubted the concerns over Middle East tensions should have seen prices rise as much as they did.

Peak wind power generation in Britain is forecast to remain fairly stable day on day at 18.3 gigawatts (GW), out of total metered capacity of 23.1 GW, Elexon data showed.

European gas storages were last seen 98.1% full, a historic high for the time of year, Gas Infrastructure Europe data showed.

In the European carbon market, the benchmark contract CFI2Zc1 fell by 0.91 euro to 80.95 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo;Editing by Tomasz Janowski)