Dutch and British wholesale gas prices edged lower on Friday on expectations of strong supplies of liquefied natural gas and healthy stock levels in Europe.

The British within-day contract fell by 0.50 pence to 153.50 p/therm by 0940 GMT while the day-ahead contract was down 6 pence at 150 p/therm, according to Refinitiv Eikon data.

“Bearish factors include MRS (medium range storage) which remains high at 84% supplemented by LNG supply which continues to be robust and there are currently 14 cargoes en route to UK terminals,” analysts at Refinitiv said in a daily research note.

The benchmark Dutch front-month contract edged down by 0.38 euros to 60.34 euros/MWh according to data from the Intercontinental Exchange (ICE).

Healthy storage levels have weighed on European gas prices in recent weeks and were 80.1% full, latest data from Gas Infrastructure Europe showed.

Analysts at Rystad however warned a continuation of cool weather could lead to a bounce in prices.

“Overall fundamentals point to a slight bullish skew for the coming week, driven by colder-than-normal weather and fluctuating wind generation in northwest Europe,” Rystad vice president Kaushal Ramesh said in a research note.

“The ongoing cold snap – which brought temperatures to 1.4 degrees centigrade below normal is now expected to last through end January amidst falling wind output, which will increase the call on gas for power and heating,” Ramesh said.

Eastbound gas flows on the Yamal-Europe pipeline to Poland from Germany and flows of Russian gas via Ukraine both fell on Friday morning, pipeline operator data showed.

In the European carbon market, the benchmark contract CFI2Zc1 was up by 0.25 euros at 84.15 euros a tonne.
Source: Reuters (Reporting by Susanna Twidale Editing by David Goodman and Alison Williams)