Gas prices in Europe are correct after a 3-week high
Dutch and British wholesale prices of gas fell on Thursday amid forecasts for more wind energy generation. This was a correction from the three-week high that they had reached earlier in the day due to supply concerns.
LSEG data shows that the benchmark front-month contract for the Dutch TTF hub fell 0.72 euros to 36.86 Euro per megawatt hour at 0952 GMT.
According to LSEG data, on Wednesday the contract reached its highest level since September 3 at 38.15 Euro/MWh.
The front-month contract in the British market was 2.21 pence less at 88.70 p/therm. Meanwhile, the day-ahead was 1.50 pence lower at the same price.
In a morning note, LSEG's Tomasz Kowalski said that given the gains on Wednesday, a price correction is likely.
He added that the gas demand for electricity generation will fall Friday due to a rise in wind power production, but this effect is partially offset by a greater demand for heating during colder weather.
Kowalski stated that "recent delays and extensions in Norwegian infrastructure is a bullish factor."
Data from Gassco show that the Norwegian gas supply for Europe and Britain on Thursday morning was 267.3 million cubic meters (mcm) a day, up from 265 mcm/day Wednesday.
The majority of maintenance at Norwegian gasfields, processing plants, and exit terminals has been completed, but there have been some minor extensions and unplanned outages in the last few days.
In a recent market note, Rabobank Research stated that "Geopolitical Tensions, especially around Russian Gas Deliveries and Middle Eastern Conflicts, continue to drive the price volatility."
They added that the market may still experience some "downtime", as storages remain above 90% in November, despite the few days of net withdrawals during the recent first cold snap.
Rabobank expects TTF gas to cost an average of 38 euros/MWh during the fourth quarter, and 36-37 euro/MWh for winter 2025/2026.
Gas Infrastructure Europe's data shows that European storages have reached 93.9% capacity.
The benchmark contract on the European carbon markets was down by 0.64 euros at 64.55 Euros per metric ton.
(source: Reuters)
