The European benchmark gas contract hit its highest level in 13 months on Monday morning as flows of Russian gas via Ukraine eased slightly, colder weather forecasts and as gas storage levels in Europe continued to decline.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 rose by 1.18 euro to 49.08 euros per megawatt hour (MWh), or $15.12/mmBtu, by 0912 GMT.

It briefly hit 49.22 euros/MWh in early trade, the highest intraday level since Nov. 6 2023.

In Britain, the day-ahead contract TRGBNBPD1 gained 5.20 pence to 121.50 pence/therm.

“Over the weekend, physical flow nominations dropped from Russia via Ukraine and remain the same today,” consultancy Auxilione said in a morning note.

Russian gas producer Gazprom said it would send 40.8 million cubic metres (mcm) of gas to Europe via Ukraine on Monday, down 3% from more than 42 mcm/day seen in recent months.

“The market has already reacted this morning to the drop in nominations and we are now at very high price levels once again,” Auxilione added.

Weather forecasts from Dec. 11 and until the end of the month had also turned colder, a trader said.

“…which again looks like it’s going to keep storage withdrawals high,” he added.

Europe’s gas storage sites are 85.47% full, more than ten percentage points lower than in 2023 in the same period, the latest data from Gas Infrastructure Europe showed.

“Lower-than-expected storage, combined with the prospect of Russian piped gas via Ukraine coming to a stop at the end of this year, is a worry for the market,” analysts at ING said in a morning note.

Meanwhile, the European Commission last week increased an EU-wide storage level target for February from 45% to 50%, which has helped to underpin prices, analysts said.

In the European carbon market, the benchmark contract was up by 1.51 euros at 69.91 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Nina Chestney)