Gas prices continue to drop in Europe amid healthy supplies
The wholesale gas prices in the Netherlands and Britain continued to drop on Wednesday morning, amid a comfortable supply situation and the prospect that European storage targets will be relaxed.
The benchmark contract for the Dutch TTF hub at the front-month was 0.94 euros lower, at 43.05 Euros per Megawatt Hour (MWh), and the contract for April was 0.83 euros lower, at 43.31 Euros/MWh.
The day-ahead contract in Britain was lower by 1.10 pence, at 104.60 cents per therm.
The prices fell to their lowest level since December on Tuesday afternoon, amid a widespread sell-off by financial participants.
A Uniper official revealed on Tuesday that the German gas hub Trading Hub Europe and representatives from the industry are in discussions with the German Government about loosening the rules regarding the filling of gas storage tanks.
On Wednesday, the EU Commission will present measures to boost European competition. Last week, a draft document showed that the EU Commission wants to develop more flexible targets to fill gas storage in EU countries.
The average temperature in north-west Europe is forecast to drop by one degree Celsius. This could lead to an increase in heating demand. Wind speeds will also fall and stay below normal over the next two weeks.
A decrease in wind power output usually increases the demand for gas generated by power plants.
The Norwegian pipeline gas and natural gas liquefied supply is stable, and the withdrawals from storage are down slightly in recent days.
Wayne Bryan, LSEG's head of European Gas Research, said: "Our outlook today for TTF day ahead is that some of yesterday's big decline will be retraced. We still believe prices should stay in the mid-40s to remain competitive with Asia due to low levels of inventory."
Norway will finance Ukrainian purchases of natural gas from its country, Ukraine's Naftogaz said on Tuesday. This comes against a backdrop of an increase in Ukrainian imports, as the war between Russia is affecting the energy system of the country.
The benchmark contract on the European carbon markets increased by 0.27 euros to 72.02 euro per metric tonne. Nina Chestney reports.
(source: Reuters)
