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EUROPE GAS-Prices drop on mild weather, as market monitors Ukraine ceasefire discussions

EUROPE GAS-Prices drop on mild weather, as market monitors Ukraine ceasefire discussions

The wholesale gas prices in the Netherlands and Britain fell on Tuesday as mild weather reduced demand. Market participants also watched the U.S. led talks in Saudi Arabia aimed at ending the conflict in Ukraine.

LSEG data shows that the Dutch front-month contract fell by 0.53 euros to 41.75 Euro per Megawatt Hour (MWh) or $13.35/mmBtu by 0900 GMT.

The British front-month contracts was down 0.50 pence to 102.50p/therm.

LSEG data shows that temperatures in north-west Europe will be 0.1-0.2C milder than normal and range between 7C and 9C. This is slightly above average.

Ulrich Weber, LSEG analyst, said that solar power should be at its peak in the next two months between March 27 and 28.

In a morning report, Auxilione stated that the main focus was "the anticipation of progress in the peace talks between U.S.A., Russia and Ukraine which were held in Saudi Arabia."

The U.S. and Ukrainian delegations will meet in Saudi Arabia on Tuesday following the Russia-U.S. meeting there on Monday. Washington is hoping that this limited ceasefire proposal, which would allow for wider peace talks at the Black Sea, could pave the way to a broader negotiation.

Washington portrayed the day-long talks between Russian and U.S. representatives on Monday in Saudi Arabia as an important step in President Donald Trump’s efforts to end the war that has lasted three years.

The price of liquefied gas from North Asia has dropped to $13.30 per million Btu. However, Europe can still attract LNG.

Analysts at Engie EnergyScan say that a substantial fall in EU gas costs could reverse the arbitrage because it's not certain Asian LNG buyers would reduce their bids the same amount.

The competition between Europe & Asia for LNG cargoes will continue. "Fortunately for Europe, Asian buyers will not buy LNG at any cost," they said.

The benchmark carbon contract in Europe fell by 0.73 euros to 70.79 euro per metric ton. (Reporting by Marwa Rashad, editing by Nina Chestney.)

(source: Reuters)