Dutch and British wholesale prices were trading marginally lower on small changes to weather forecasts on Tuesday morning, after rising more than 2% the previous day on colder forecasts and a tighter supply outlook for liquefied natural gas (LNG).
The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 inched lower by 0.09 euro to 39.90 euros per megawatt hour (MWh) by 0756 GMT, LSEG data showed.
The Dutch day-ahead TRNLTTFD1 contract was down 0.21 euro at 39.67 euros/MWh.
In the British market, the day-ahead contract TRGBNBPD1 was down 0.10 pence at 99.00 pence per therm, while the front-month was down 0.50 pence at 99.90 p/therm.
Weather forecasts were a touch warmer again, while wind power forecasts for the remainder of this week and next week also improved, reducing the demand for gas for heating and from power plants, LSEG analyst Ulrich Weber said.
On Monday, prices had risen on a colder revision to European weather forecasts and some Norwegian gas outages announced for November, he added.
Tensions in the Middle East, a key hub for LNG supply, also continued to provide support for gas markets, analysts at ING said in a note.
“While the market is nervous about potential LNG supply disruptions due to escalation in the region, European fundamentals remain comfortable,” they added.
European storages remain around 95% full, above the five-year average of 92% for the time of year, although they were unlikely to reach 100% before the heating season starts, ING’s analysts said.
Meanwhile, the next wave of LNG supply will come online only from 2027, later than the earlier forecast of 2025, due to project delays, a TotalEnergies executive warned.
“This is not new. It just confirms our own view that the period of potential tightness in the LNG market is 2025-2026,” analysts at Engie EnergyScan said in a note.
The delays also coincided with the expected end of Russian gas transit through Ukraine to Western Europe by the end of this year, they added.
At the same time, Egypt is expected to extend its demand for LNG imports, after previously being an exporter.
In the European carbon market CFI2Zc1, the benchmark contract was down 0.16 euro at 61.60 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Nina Chestney)