Prices of gas in Europe are falling as the warm weather reduces demand
The Dutch and British wholesale prices of gas eased Tuesday morning. They traded in a narrow band as the warm weather reduced heating demand.
The benchmark Dutch front month contract fell 0.23 euros to 31.62 euro per megawatt-hour (MWh), which is $11.50/mmBtu by 0826 GMT. Meanwhile, the June contract dropped 0.66 euros to 31.74 euro/MWh according to LSEG.
The British day-ahead contract is down 1.20 pence to 76.00p/therm.
The temperatures in north-west Europe will be above average until the next week, before they drop from May 5-9. LSEG data shows that the demand for heating will decline by 217 gigawatt-hours per day (GWh/d), on the day before, to 1001 GWh.
Norwegian flows into Northwest Europe dropped by 9 million cubic meters per day due to a maintenance cut at Ormen Lange, which will last until the end of May. However, this had been priced in for some time and it is unlikely that there will be any additional impact on price, according to LSEG analyst Yuriy Onieshkiv.
He added, "Our price forecast today is sideways amid a largely unchanged fundamental image."
Markets are still looking for progress in a possible peace agreement between Russia and Ukraine.
On Monday, Russian President Vladimir Putin declared a ceasefire of three days in the war against Ukraine in May in honor of the 80th anniversary since the Soviet Union's victory in World War Two.
Putin's action appeared to be a signal that Russia still wants peace, something Ukraine and its European Allies deny. Meanwhile, President Donald Trump's Administration in Washington is growing impatient with the stuttering attempts towards a deal.
Auxilione, a consultancy, said that EU gas storage is quickly approaching 40% capacity and will remain close to 2022 trends which were characterized by aggressive injection rates during the summer months.
The benchmark contract on the European carbon markets fell by 0.73 euros to 64.58 euro per metric tonne. (Reporting and editing by Kirby Donovan; Marwa Rashad)
(source: Reuters)
