Dutch and British wholesale gas prices were mixed on Wednesday morning, with colder weather spurring demand, and as the market awaits further clarity over a potential ceasefire in the Ukraine war after a recent step-up of attacks.
The benchmark front-month contract at the Dutch TTF hub (TRNLTTFMc1) was down 0.78 euro at 42.70 euros per megawatt hour (MWh) by 0959 GMT, LSEG data showed.
It had closed at its highest since March 3, according to the data.
The British front-month contract (TRGBNBPMc1) was up 1.78 pence at 104.50 pence per therm.
News of Ukraine agreeing on a 30-day ceasefire proposal from the U.S. was likely impacting the Dutch benchmark contract on Wednesday after it “overshot” on the upside on Tuesday, a European trader said.
Ukraine on Tuesday said it was ready to support a U.S. proposal for a 30-day ceasefire with Russia, although Russian President Vladimir Putin is sceptical.
However, prices climbed on Tuesday on increased attacks between Russia and Ukraine impacting energy infrastructure and comments from European Energy Commissioner Dan Jorgensen that the bloc wanted to avoid Russian gas supplies in the future.
Further in, the Dutch day contract (TRNLTTFD1) was up 0.22 euro at 43.60 euros/MWh, while the British equivalent (TRGBNBPD1) eased by 0.25 pence to 108.25 p/therm.
“We assess that the colder medium-term weather forecasts for April should drive the market higher today,” LSEG analyst Saku Jussila said in a morning note.
For the market, the key question remains on how the rest of the summer looks when Europe needs to re-stock its depleted storages, the trader said.
The two main things to watch out for here were renewable electricity production, which could reduce or lift the need for gas-fired power generation, and competition for liquefied natural gas (LNG) with Asia, the trader added.
EU gas storage sites were last seen 35.9% full, data from Gas Infrastructure Europe showed, with the EU maintaining a 90% refilling target by Nov. 1.
In the European carbon market (CFI2Zc1), the benchmark contract inched down by 0.45 euro at 67.79 euros per metric ton.
Source: Reuters