EUROPE GAS - Prices trade within a narrow band amid cold weather and storage concerns
The Dutch and British wholesale prices of gas traded in a narrow band on Wednesday morning. They remained near their 15-month peak seen earlier this week amid a cold weather forecast and concern over the storage build.
According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was almost flat at 52.30 Euros per megawatt-hour (15.93/mmBtu) by 0949 GMT.
The contract reached a high intra-day of 54.61 euro/MWh Monday. This is its highest level since 2023, and it has increased by over 30% since mid-December.
The Dutch day-ahead contract increased by 0.37 euros to 52.65 Euro/MWh.
The front-month contract in Britain rose by 1.29 pence to 128.75 pence per therm.
Temperatures in Northwest Europe will begin a downward trend the next day, dropping by 0.8 degCelsius. LSEG data shows that a minimum of 1 degC is expected to be reached within a week.
EnergyScan analysts stated in a daily report that "low temperatures" in many European countries are keeping gas demand high (for heating).
Auxilione, a consultancy, said that the fundamentals of the market remain unchanged. There is plenty of concern in the short-term for this trend to continue. Meanwhile, colder temperatures expected in the next few days will increase pressure on storage withdrawals.
Analysts at Auxilione said that "while we can see European nations reviewing their requirements for gas storage refill next winter, it is still the case that the lower the stock levels are by the end of the month of March, the more will be required to inject in the summer. The negative spread between summer and winter contracts remains very wide."
Gas Infrastructure Europe reported that Europe's gas storage tanks are currently 51,97% full.
The market has so far ignored the news of China's retaliatory duties in response to the new U.S. sanctions against China, which impose a 15% tax on U.S. LNG.
A steep premium on US LNG has already pushed most US LNG volumes to Europe.
The benchmark contract on the European carbon markets was down by 1.02 euros, at 79.86 euro per metric ton.
(source: Reuters)
