British and Dutch wholesale gas prices fell on Tuesday morning as demand remained low due to strong wind power generation, while imports of liquefied natural gas (LNG) to Europe remained high as a result of subdued Asian consumption.

The European benchmark, Dutch front-month contract TRNLTTFMc1 was 7 euros lower at 115.50 euros per megawatt hour (MWh) by 1003 GMT, while the January contract TRNLTTFMc2 was 1.60 euros lower at 126.10 euros/MWh.

Although the winter gas season began in early October, when heating demand typically rises, Europe has experienced milder weather than usual for the time of year, which has helped dampen demand.

“Our outlook is for prices to remain rangebound with some upside possible when looking at the increase in heating demand over the coming days,” Refinitiv analysts said.

COVID restrictions in China and lower factory activities has dampened demand for energy in the country.

“This should ensure the record level of (LNG) cargoes delivered into Northwest Europe continues,” Refinitiv analysts said, calling it one of the main bearish factors in the European markets.

Meanwhile, eastbound gas flows via the Yamal-Europe pipeline to Poland from Germany fell on Tuesday morning, data from pipeline operator Gascade showed.

The British gas price for immediate delivery TRGBNBPWKD fell 36 pence to 40 pence/therm, while the next-day delivery contract TRGBNBPD1 was down 21.1 pence at 45 pence/therm.

Stronger wind output typically reduces demand for gas from power plants.

In the European carbon market, the benchmark contract CFI2Zc1 was 1.22 euros lower at 78.75 euros a tonne.
Source: Reuters (Reporting by Bozorgmehr Sharafedin; Editing by Shailesh Kuber)