EUROPE GAS - Prices rebound on technical purchases and strong demand
The Dutch and British wholesale gas market rebounded Thursday on technical buying and strong demand.
According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was up by 2.00 euros, at 43.40 Euros per megawatt hour, or $13.33 / mmBtu at 0909 GMT.
The front-month contracts hit a low of 40.85 euro/MWh, a 10 week low on Wednesday. This was due to the expectation of warmer weather as well as expectations that the European Commission would relax its targets for countries storing gas in advance of winter.
The Dutch April contract increased by 1.95 Euros to 43.65 Euros/MWh.
The day-ahead contract in the British market was up 5.44p at 105.49p/therm.
In a daily note, LSEG analyst Wayne Bryan stated that the recent two days' large declines would be reversed.
He said that the demand for LDZs (local distribution zones) is increasing on a day-ahead basis.
LSEG data shows that LDZ demand for Friday was expected to increase by 237 gigawatt-hours a day.
In a daily note, analysts at Energi Danmark stated that "the first signals point today towards a correction following the previous sharp losses."
A trader stated that technical buying has also helped to boost prices after the price decline in the last few days caused the market to look oversold.
According to LSEG, the relative strength index (RSI), of the Dutch-front-month contract, almost reached 30 on Wednesday afternoon. This technical threshold indicates that a commodity or stock may be due for a correction upward.
The benchmark contract on the European carbon markets was up 0.78 euros at 71.81 euro per metric ton. (Reporting by Susanna Twidale, Editing by Eileen Soreng).
(source: Reuters)
