Prices for Europe GAS fall due to mixed temperatures and strong renewable output
The wholesale gas prices in the Netherlands and Britain fell on Tuesday, reversing a 15-month peak reached the previous session due to mixed weather forecasts and a higher renewable production.
According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was down by 1.18 euros at 52.57 Euro per Megawatt-Hour (MWh) or $15.91/mmBtu at 1235 GMT.
On Monday, the contract reached its highest intra-day level of 54.61 euro/MWh. This is its highest level since November 2023.
The Dutch April contract is down by 2.00 euros at 51.65 Euro/MWh.
The front-month contract in Britain fell by 3.77 pence to 127.28 pence per therm.
LSEG data indicated that the wind power output in Germany was expected to increase by 3.9 gigawatts to 16.2 GW on Wednesday.
Elexon data shows that the peak wind output in Britain is expected to be 18.6 GW on Wednesday.
The LSEG analysts said that temperatures in Northwest Europe are expected to increase by around 2 degrees Celsius on Wednesday. However, cooler temperatures will be experienced towards the end the week.
Ulrich Weber, LSEG analyst, said that "Temperature Forecasts still limit the downside because the duration of this cold spell is uncertain."
Gas Infrastructure Europe data shows that Europe's gas storage tanks are currently 52.65% filled.
Analysts at Auxilione, a consultancy, said that "colder temperatures will be expected in the coming week, lower than normal seasonal levels. This is likely to put further pressure on EU gas supplies."
A trader attributed a price drop to media reports that Italy was calling on the EU for a reduction in its gas storage requirements.
The European Union has set a mandated target for the filling of storage sites, which not only helps to guarantee supplies but also boosts prices.
The benchmark contract on the European carbon markets was down by 0.33 euros, at 80.63 euro per metric ton.
(source: Reuters)
