Prices fall in Europe due to milder weather and abundant LNG
The Dutch and British wholesale gas price fell on Friday morning due to forecasts of mild weather and winds next week, and because higher prices in Asia led to more LNG flowing into Europe.
LSEG data revealed that the benchmark front-month contract for the Dutch TTF hub had fallen 1.60 euros to 43.70 euros (MWh) or $13.19 /mmBtu by 0931 GMT.
The Dutch March contract is down 1.54 euros to 43.76 Euros/MWh.
The Dutch day-ahead rate was lower by 1.10 euros, at 44.40 Euros/MWh. Its British equivalent fell by 4.70 pence, at 111.30 Pence per therm.
A trader reported that prices are falling from the 14-month highs attained at the beginning of the year due to milder weather starting next week, increased LNG flows into Europe, and a slowdown in the rate of gas removal from storage sites.
Forecasts show that temperatures in North-West Europe will plummet at the weekend but then climb back to normal or even higher levels by Wednesday.
If temperature forecasts improve on a longer-term basis, the trader said that the TTF front-month may break below the support of 44-43 euros/MWh. The British front could also fall to 106-109 pence/therm.
Analysts at ING stated in a morning report that Europe is a more appealing market for LNG because of the higher prices.
LSEG's ship tracking data revealed that some LNG tankers originally headed for Asia changed their course to Europe.
Gas Infrastructure Europe reported that Europe's storage sites were 68.24% filled.
Energy Aspects analysts project that Europe's stocks will be around 40 billion cubic meters (bcm), which is 37% full by the end of March, a decrease of 23.2 bcm compared to last year.
They added that some of the tightening was due to the loss of Russian gas pipelines of 4.1 billion cubic meters y/y this quarter, and an increase of 4.4 billion cubic metres y/y in demand mainly on weather normalisation.
The last two winters were unusually warm.
The benchmark contract on the European carbon markets was down 0.75 euros at 72.71 euro per metric ton.
(source: Reuters)
