Dutch and British wholesale gas prices traded lower on Tuesday morning, weighed down by mild weather and full storages that offset any concerns over liquefied natural gas (LNG) supplies.
The benchmark front-month contract at the Dutch TTF hub was down 0.40 euros at 28.00 euros per megawatt hour (MWh) by 0911 GMT, LSEG data showed.
The March contract shed 0.70 euros to 27.70 euros/MWh.
In Britain, the front-month contract was down 1.20 pence at 68.50 pence per therm.
“The European natural gas market has had a relatively comfortable 2023/24 heating season so far, which puts the market in a good position for the rest of the year,” analysts at ING said in their Energy Outlook 2024 report.
Storage should be 52% full at the end of the heating season, compared to a 5-year average of 41%, making the job of refilling storage through the summer months a lot more manageable, they said.
Europe’s gas stores are currently 71.5% full, latest data from Gas Infrastructure Europe showed.
The British within-day contract was down 2.50 p at 67.75 p/therm and the day-ahead contract TRGBNBPD1 fell 1.50 p to 68.00 p/therm.
The temperature outlook remained unchanged with warmer than normal levels for the coming week before dipping below for the following month, consultancy Auxilione said in its daily market report.
“That, alongside any developments impacting LNG deliveries towards Europe, will keep markets alert – although so far impact appears limited,” they added.
LNG tankers carrying Qatari gas are currently going a longer route around Africa instead of via the Suez Canal due to attacks on ships in the Red Sea, while production issues at U.S. plant Freeport may curb supplies.
Wind power generation is set to rise too, limiting demand for gas in the power sector.
Peak wind power output in Britain will rise from 9.8 gigawatts (GW) on Tuesday to 18.3 GW on Wednesday, out of the total metered capacity of about 23 GW, Elexon data showed.
In the European carbon market, the benchmark contract CFI2Zc1 inched lower by 0.03 euros to 61.75 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo, Editing by Susanna Twidale)