EUROPE GAS-Prices

The Dutch and British wholesale gas price continued to decline on Tuesday morning due to the milder weather forecasts next week, high winds speeds and stable supplies.

According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was 46.65 euros per Megawatt Hour (MWh) as of 0947 GMT. This is a decrease of 0.61 euros.

The contract for the month of March is down by 0.52 euros at 46.63 euro/MWh.

The front-month contract in Britain fell by 2.04 pence, to 116.76 cents per therm.

LSEG data shows that despite another cold snap being forecast for north-west Europe from Friday through the weekend, temperatures are expected to be milder than yesterday, Jan. 15.

Today, wind speeds will remain strong and limit gas demand.

In North-West Europe, however, the gas-for power demand is expected to be 36 million cubic meters (mcm), per day, higher, at 78 mcm/day, on the day ahead.

Saku Jussila, LSEG's gas analyst, said that "wind speeds will be high today and then drop sharply tomorrow as the cold front arrives."

Elexon data shows that peak wind generation in Britain is expected to be around 15,1 gigawatts today and 14,7 GW tomorrow.

Analysts from Engie EnergyScan say that EU net storage withdrawals are down due to a more stable spot balance, but the gap in storage compared to last years is still high. On 5 January, EU Gas stocks were on average 69.94% filled, compared with 84.96% the previous year.

Jefferies analysts expect tighter markets for gas in the future due to delays of projects and higher than expected demand.

They said that the price of LNG in Europe and Asia could exceed the prices of 2024 due to the increased demand for gas in Europe and the decline in Russian exports, which would outpace the growth expected in global LNG supplies.

The market will loosen after 2025 with 175 million tonne of additional supply between 2026 and 3030, primarily coming from the US, and Qatar," the experts added.

The benchmark contract on the European carbon markets was down by 0.91 euros at 73.45 euro per metric ton.

(source: Reuters)