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Prices continue downward trend on mild weather, LNG supply

British and Dutch wholesale gas prices continued their downward trend on Thursday morning as milder weather forecasts and healthy liquefied natural gas supply weighed on prices.

The British day-ahead contract was down 14.00 pence at 190.00 p/therm by 1029 GMT, while the working days next week contract was 19.00 pence lower at 185.00 p/therm.

In the Dutch TTF market, the January price was down by 4.27 euros at 93.23 euros per megawatt hour (MWh), while the February contract was 3.60 euros lower at 95.00 euros/MWh.

Weather forecasts still show slightly milder temperatures next week, while liquefied natural gas (LNG) supply remains strong into early January.

“With no major change in mild and windy weather forecasts for the end-of-year break and the continuation of strong LNG imports, European gas prices are likely to remain under downward pressure today,” said analysts at Engie EnergyScan.

“But can industrial gas demand rebound at a higher level? This remains a key question for the coming days and weeks,” they added.
Peak wind generation in Britain is forecast at 9.1 gigawatts (GW) on Thursday, rising to 11.3 GW on Friday, out of total metered capacity of around 22 GW, Elexon data showed.

Strong wind output typically reduces demand for gas from power plants.
Source: Reutters (Reporting by Nina Chestney)

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