Prices near four-week-low on US-Russian talks and weaker demand
Dutch and British wholesale prices of gas held near four-week lows, as the market awaited the outcome of talks between the U.S.A. and Russia on how to end conflict in Ukraine. Strong renewables output also curbed demand.
According to LSEG, the benchmark front-month contract for the Dutch TTF Hub was down 0.07 euros at 47.65 Euro per Megawatt Hour (MWh), which is $14.60/mmBtu by 0913 GMT.
The contract traded earlier at 47.15 Euros/MWh, the lowest level since 20 January.
The Dutch April contract is down by 0.29 euros at 47.44 Euro/MWh.
The day-ahead contract in Britain was lower by 2.65 pence, at 115.1 p/therm.
According to LSEG, the TTF benchmark front month contract has dropped around 20% since reaching a two-year intra-day high of 59.27 euro/MWh on February 10.
Greg Molnar of the International Energy Agency said that the recent drop in gas prices was caused by "potential softening EU storage targets, the peace talks with Russia, and milder forecasts for northwestern Europe."
He said in a LinkedIn post that "weak demand in Asia and especially in China" also adds to the bearish outlook.
On Tuesday, U.S. officials and Russian officials met in Riyadh. This could pave the road for a meeting between U.S. president Donald Trump and his Russian counterpart.
The forecasts of gas demand have been weakened due to the strong renewable energy output and warmer temperatures. This has also affected prices.
Analysts from LSEG predicted that the total demand in north-west Europe would fall by around 600 gigawatt-hours a day on the day ahead.
LSEG analyst Yuriy Onyshkiv stated that "the recent run (of temperatures) is in line (with) the previous forecast and indicates a strong rise in temperatures above (normal) levels over the next 3 days."
The benchmark contract on the European carbon markets was down by 0.30 euros at 76.88 euro per metric ton. (Reporting by Susanna Twidale, editing by Nina Chestney).
(source: Reuters)
