Prices of EUROPE Gases drop on forecast for warm weather

Dutch and British wholesale prices of gas were lower on Monday due to a forecast for warmer weather and the market ignoring the geopolitical developments that have taken place in Syria.

By 0948 GMT, the benchmark front-month contract for the Dutch TTF hub had fallen 0.81 euros to 45.56 Euro per Megawatt Hour (MWh), which is $14.38/mmbtu.

The day-ahead contract in Britain fell by 1.4 cents to 113.5 pence per therm.

In a morning report, analysts from Engie's EnergyScan stated that "further losses may be recorded today due to the revised weather forecast for warmer temperatures over the weekend and the return of higher than average temperatures next week in Europe."

On Sunday, Syrian rebels announced that they had overthrown President al-Assad. They ended a 50 year family dynasty with a lightning-fast offensive. This sparked fears of a fresh wave of instability for a region already ravaged by war.

"Escalations took a surprising twist with the overthrow of the long-standing Syrian government. While it is unlikely to have a direct impact on energy markets, geopolitical events can be a source of concern for global markets. This will be closely watched by the consultancy Auxilione in a daily report.

Auxilione stated that temperatures will continue to drop towards the end the year, which could result in a high heating demand. However, so far, Europe's gas reserves are still strong, despite a faster withdrawal than previous years.

Gas Infrastructure Europe's latest data shows that EU gas reserves are 82.38% filled.

The benchmark contract on the European carbon markets was down by 0.57 euros at 67.74 euro per metric ton.

(source: Reuters)