Europe Gas: Prices fall as rising temperatures curb demand

Dutch and British wholesale gas prices fell on Tuesday as forecasts of warmer weather curbed demand for gas.

The benchmark front-month contract at the Dutch TTF hub fell by 0.51 euros to 24.30 euros per megawatt hour (MWh) by 0916 GMT, LSEG data showed.

The May contract edged down by 0.25 euros to 24.70 euros/MWh.

In Britain, the front-month contract was 1.12 pence down at 61.25 pence per therm while the day-ahead contract TRGBNBPD1 fell by 2 pence to 62.00 pence/therm.

“The latest long-term weather runs show an improved outlook, with temperatures now expected to stay above seasonal normal until late March and then very close to seasonal normal throughout April,” consultancy Auxilione said in a daily market note.

The 24 euros level is providing some technical support for the TTF front-month contract but the overall picture is bearish, LSEG analysts said, pointing to temperatures that are expected to peaking around 11 degrees Celsius in Northwest Europe by Friday.

“This signals clearly that the heating season has come to an end we may see prices drop,” LSEG analyst Tim Crump said in a daily research note.

Europe’s high gas storage levels also maintain bearish pressure on the market.
Europe’s gas stores are currently 60.6% full, latest data from Gas Infrastructure Europe showed.

“European gas demand was weaker than expected in February. As a result, we raise our forecast for winter-end storage fill to 56%, up from 51%,” Morgan Stanley analysts said.

In the European carbon market, the benchmark contract CFI2Zc1 fell by 0.75 euros to 55.46 euros a metric ton.
Source: Reuters (Reporting by Susanna Twidale, Editing by David Goodman)