Prices for gas in Europe are lower due to milder weather forecasts, but storage concerns remain
Dutch and British wholesale prices of gas eased on Monday, as latest forecasts show milder temperatures for next week. However, lower storage levels in comparison to the past five years continue support prices at 14-month highs.
According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was 0.77 euros lower at 48.83 Euros per megawatt hour or MWh, or $14.81/mmbtu at 0856 GMT.
The front-month contract in Britain was down by 1.52 pence, at 122.65 cents per therm. Meanwhile, the day-ahead was down by 1.90 pence, at 122.25 cents per therm.
The recent rally has lost its steam, and the coming cold should have been priced in. Ulrich Weber, LSEG analyst, said that the indications of a warmer week next week will dominate. Prices are expected to be slightly lower.
The temperatures were normal for this time of year on Monday, but will drop to below freezing by Tuesday. It is expected to remain cold through the rest of the week.
Weber stated that the wind power generation will also be strong in the next two day but will then begin to decline.
Prices rose to 50 euros/MWh last week for the first since October 2023, following the cessation of Russian gas pipeline deliveries via Ukraine as well as colder weather forecasts.
The colder-than-usual weather could see storage falling at a quicker-than-expected pace, analysts at ING said in a morning report.
They added that European storage sites were currently just above 70% full, down from 85% last year, and below the average for the past five years of 76%.
"Storage levels will still allow Europe to get through this winter comfortably." The analysts at ING said that the filling of storage during the injection season is expected to be a larger job than last winter, which will provide some support for summer prices.
TTF Summer 2025 Contract traded at 48.80 Euros/MWh compared to 45.50 Euros/MWh next winter.
The benchmark contract on the European carbon markets was down by 0.96 euros at 74.98 euro per metric ton.
(source: Reuters)
