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EUROPE GAS-Prices increase on shrinking stocks and cooler outlook

Dutch and British wholesale gas costs increased on Thursday, as winter contributed to concerns about the trouble of filling up fastdepleting gas stocks and balanced out the effect of indications of a reboot at the U.S. Freeport export plant.

The benchmark front-month contract at the Dutch TTF center was up 1.63 euros at 50.40 euros per megawatt hour ( MWh), or $15.38/ mmbtu, by 0952 GMT, LSEG information revealed.

The Dutch day-ahead agreement was up 1.23 euros at 50 euros/MWh.

In Britain, the front-month NBP agreement got 3.73 cent to 126.85 p/therm, while the day-ahead contract was up 3.75 p at 128 p/therm.

The market had actually expected the gas storage withdrawal rate to sluggish, which has yet to occur.

Europe's gas storage websites are 58.5% full, already listed below the level left in stock after completion of the previous, mild, winter season, data from Gas Infrastructure Europe revealed.

With storage at just 58-59% and little versatility in supply, any disruption to the refill period will contribute to European gas prices, one trader stated.

Italy's energy minister stated on Thursday the country strategies to make an early start on filling strategic gas stockpiles, as it expects gas wholesale costs to spike in the summer season.

Europe will likely need to draw in over 100 cargoes of extra melted natural gas (LNG) to bridge the filling gap compared to 2024, leading to unusually high prices for the lower demand summertime.

The TTF summertime agreement last traded at a 5.48 euros premium to winter 25/26, LSEG data showed.

Need is also likely to stay firm, with most current weather condition projections indicating cooler temperature levels for the duration of Jan. 28-Feb.5, LSEG expert Yuriy Onyshkiv stated.

European prices have likewise drawn assistance this week from an outage at the Freeport LNG plant, the second-largest U.S. LNG export center, due to power cuts in the middle of a winter storm in Texas.

Power has actually been restored and gas has actually started streaming to the plant again, getting rid of the threat of an LNG supply drop from the U.S in the near term, Onyshikv stated.

In the European carbon market, the criteria agreement was up 2.51 euros at 81.45 euros a metric ton.

(source: Reuters)