Prices of EUROPE Gas are lower as Middle East Risk Premiums recede

Dutch and British wholesale prices of gas fell on Monday, as the market reduced its Middle East premium following Israel's weekend retaliation attack against Iran and forecasts for milder weather.

LSEG data shows that the benchmark front-month gas contract at Dutch TTF hub dropped by 1.25 Euros to 42.25 Euros per megawatt hour by 0915 GMT.

The front-month contract in the British market fell 2.75 pence, to 107.25 p/therm. And the day-ahead was down by 1.75 pence.

Analysts at ING said that gas prices could trade lower today, as the markets are of the opinion that the Middle East may deescalate following the events over the weekend.

The oil prices fell by more than 4% as a result of Israel's retaliatory attack on Iran, which bypassed Tehran’s nuclear and oil facilities, and didn't disrupt energy supplies.

LSEG analyst Yuriy Onieshkiv said that the day-ahead price pressure was also due to expectations of warmer weather in northwest Europe during the next two week period, which will impact residential demand.

He added that the gas supply from Norway had also increased.

Gassco data shows that Norwegian gas exports rose to 332.7 million cubic meters (mcm/day) on Monday from 325.2 mcm/day the previous day.

The first gas withdrawals from European storage occurred last week, and this helped to support prices. Storage (levels) are expected to start heating season slightly lower than we had anticipated. But even at 95% capacity, these levels are comfortable. Just not quite as comfortable as expected.

The benchmark contract on the European carbon markets was lower by 1.72 euros, at 65.25 euro per metric ton.

(source: Reuters)