Prices fall on comfortable supply, stronger wind

Dutch and British wholesale gas prices declined on Monday morning, after gains last week, on comfortable supply and rising wind output.

The benchmark front-month contract at the Dutch TTF hub declined by 0.74 euro to 30.00 euros per megawatt hour (MWh) by 0906 GMT, while Q3 contract was down 0.67 euro at 30.63 euros/MWh, LSEG data showed.

In the British market, the May price was down 1.70 pence at 75.50 pence per therm.

Prices were bullish for most of last week due to concerns about tensions in the Middle East but started to decline on Friday afternoon after an Israeli strike on Iran was more muted than anticipated.

North-west Europe temperatures are forecast lower this week, but they have been adjusted around 2 degrees Celsius higher for next week, LSEG data showed.
Wind speeds are also forecast to rise which could reduce demand for gas from power plants.

“(European gas prices) have to choose between confirming or reversing the one-year down trend,” said analysts at Engie EnergyScan.

European gas storage sites are around 62% full, an all-time high for this time of the year.

“With TTF May 2024 prices remaining well below their one-year average, the comfortable spot situation is winning for the moment,” the analysts added.

On the bullish side, there are several planned outages at Norwegian gas fields starting this week.

But Norwegian gas flows to Britain have risen on Monday morning as gas has been re-routed from continental Europe over the weekend due to an outage at the Emden monitoring station.

In the European carbon market, the benchmark contract CFI2Zc1 was down 2.13 euros at 66.68 euros per metric ton.
Source: Reuters (Reporting by Nina Chestney)