EUROPE GAS-Prices drop on profits and mild weather

Dutch and British wholesale prices of gas fell on Tuesday due to profit-taking after recent gains, a comfortable stock position and forecasts for mild weather.

LSEG data show that the benchmark front-month contract for the Dutch TTF Hub was down by 1.05 euros to 38.10 euros per Megawatt Hour (MWh), which is $13 mmBtu at 0844 GMT.

The contract for December was down by 0.67 euros, at 38.6 Euro/MWh.

The day-ahead contract in the British market was down 1.35 cents at 91.00 pence per therm.

In a daily report, Auxilione stated that "as we enter the winter delivery season, temperatures will remain close to normal seasonal levels for the coming weeks and 94% of our gas storage capacity is filled."

The escalating conflict between Israel and the Middle East is causing continued market anxiety.

Israel's increased frequency of attacks on the Hezbollah in Lebanon and Houthi in Yemen has sparked fears that the fighting could spiral out of control, attracting Iran and the United States as Israel's principal ally.

Timothy Crump, LSEG analyst, said that if Egypt's supply via Israel is interrupted through the Arab Gas Pipeline, it could put them in direct competition with Europe for spot cargoes.

EnergyScan analysts at Engie said that after a few days of gains, some financial players may have started to take their profits.

LSEG data shows that the total Norwegian exports to Africa are now at 230 mcm/d. This is an increase of 5 million cubic meters per day.

Gazprom, a Russian company, said that it would send the same amount of gas via Ukraine to Europe on Tuesday as on Monday.

Gas Infrastructure Europe data shows that European storage sites are currently 94,28% full.

The benchmark EU carbon permit contract fell by 1.37 euros to 64.19 euro per metric tonne on the European carbon market.

(source: Reuters)