EUROPE GAS - Dutch benchmark falls to two-week low due to weather, storage hope and peace talks

The benchmark Dutch Gas Contract fell on Friday, to its lowest level in over two weeks. This was due to forecasts for milder weather and talks about a loosening up of European gas storage goals, as well as ongoing U.S. attempts to end the conflict in Ukraine.

LSEG data shows that the benchmark front-month contract for the Dutch TTF hub fell 1.30 euros to 49.75 euros per Megawatt Hour (MWh), which is $15.28/mmBtu at 0913 GMT.

The contract dropped to 49.25 Euros/MWh earlier, the lowest since January 29.

Analysts at Energi Danmark wrote: "Weather forecasts agree that milder, windier weather is on its way (probably next week)."

The Dutch day-ahead contract dropped 1.58 euros, to 50.25 euro/MWh.

Auxilione, a consultancy, said that news of the potential beginning of talks on ending the conflict in Ukraine as well as separate discussions about easing EU storage rules led some participants on the market to bet higher prices in order to exit quickly and make a profit.

This may limit the amount of movement in the stock market.

Germany is in favor of less strict storage targets due to concerns over the costs of filling them, given the current market conditions. This was stated after a Thursday meeting between EU member states and the European Commission.

EU regulations stipulate that storage sites must reach 90% capacity by November 1, but there are several interim goals along the way. Gas Infrastructure Europe data shows that EU gas storage sites are about 47% full and have been for a longer time due to the colder weather.

The U.S. is still pushing for an end to war in Ukraine. On Friday, U.S. vice president JD Vance will meet with Ukrainian President Volodymyr Zelenskiy in Munich.

The benchmark contract on the European carbon markets was up by 0.28 euros, at 78.33 euro per metric ton. Nora Buli, reporting from Oslo; David Goodman, editing

(source: Reuters)