Dutch and British wholesale gas prices firmed slightly on Tuesday around technical support, after hitting near six-week lows the previous day on milder weather forecasts that should limit demand and steady gas flows.
The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was up 0.49 euro at 40.45 euros per megawatt hour (MWh), or $12.43/mmbtu, by 0944 GMT.
On Monday, it fell to 39.10 euro/MWh intraday, its lowest level since Nov. 6.
In Britain the front-month contract TRGBNBPMc1 firmed by 0.48 pence to 100.63 p/therm, while the day-ahead contract TRGBNBPD1 rose 0.95 pence to 98.00 p/therm.
Monday’s drop was likely overdone moving contracts into oversold territory, with the market now showing a slight technical correction, a trader said.
“So despite mild temperatures and high wind I see it more reactive to technical factors right now,” the trader added.
Profit taking and new long positions opening at the new lower price levels should provide support, analysts at Engie EnergyScan said in their morning note.
Peak wind power generation in Britain is set to remain at 19 gigawatts (GW), out of around 23 GW of installed capacity, according to Elexon data.
The weather in Europe will be unsettled, mostly mild and windy with brief drier and cooler episodes only, LSEG meteorologist Georg Mueller said.
Increased flows of Norwegian gas to Europe were also capping upside to prices, LSEG analyst Timothy Crump said.
Further bearish sentiment stemmed from Ukrainian Prime Minister Denys Shmyhal saying his country was willing to devise a deal enabling non-Russian gas to transit through its territory to western Europe, but ruled out any extension of an existing deal with Russia.
Russian gas producer Gazprom said it would send 42.4 million cubic metres (mcm) of gas to Europe via Ukraine on Tuesday, up from 42 mcm on Monday.
In the European carbon market CFI2Zc1, the benchmark contract was up 0.15 euro at 65.42 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Susan Fenton)