Prices fall in Europe amid profit-taking and temperature revision

The wholesale gas prices in the Netherlands and Britain fell Wednesday morning, as profit-taking took place after Tuesday's new two-year peak.

According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was 1,35 euros lower at 55.10 Euro per megawatt hour by 1307 GMT.

The Dutch April contract is down by 2.48 Euros at 55.12 euro/MWh.

The front-month contract in Britain fell 4.54 pence, to 134.41 cents per therm.

A gas trader stated that forecasts for the average temperature in North-West Europe have been slightly revised upwards from the weekend. There is also some profit-taking after prices hit two-year-highs earlier this week.

LSEG data indicates a slight increase in temperatures between Feb. 15-21.

In a letter sent to the European Commission, the European Union's gas and trading industries have asked that the gas price cap not be included in the package of industrial support this month.

Senior EU officials told me that the idea is not being considered.

This week, gas prices hit their highest level since February 2023.

BNP Paribas analysts said that recent gains are overdone.

BNP Paribas analysts stated in a recent research note that they believe the market has priced in the possibility of a European winter being worse than expected, while the summer in APAC (Asia-Pacific), is as inflexible as it was in 2024.

The analysts said, "We believe both of these suppositions to be wrong and therefore don't find a basis for the current prices."

Goldman Sachs analysts said that due to a decrease in stocks, Europe must import more liquefied gas (LNG), this year, to maintain gas storage levels at a comfortable level for the winter ahead.

They said: "As a consequence, we revised our north-west European imports of LNG higher by 8% (14.4 million cubic metres/day), which we estimate will result in storage being 31% full at the end of March and 86% at the end October."

Ukraine

Data provided by the operator for gas transmission system shows that gas imports will be increased by a third to 22,6 mcm/day on Wednesday, following Russian missile attacks against Ukrainian gas production plants earlier in this week.

The benchmark contract on the European carbon markets was lower by 1.43 euros at 81.16 euro per metric ton. (Reporting and editing by Susanna Twdale, Nina Chestney)

(source: Reuters)