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EUROPE GAS-Prices rangebound amid strong supply, cooler weather

The Dutch and British wholesale prices of gas continued to trade within a narrow band on Wednesday morning as the demand for gas for electricity declined while heating demand increased due to the cooler weather.

LSEG data shows that the benchmark Dutch front-month contract was 31.30 euros per Megawatt Hour (MWh) or $10.78/mmBtu at 0859 GMT. This is a decrease of 0.08 Euro.

The Dutch December contract fell by 0.37 euros to 31.55 Euro/MWh.

The British November gas prices was lower by 0.65 pence, at 80.00 pence a therm.

In a daily note, LSEG analyst Ulrich Weber stated that the demand for heating in local distribution zones (LDZs) is expected to increase by 191 gigawatt hours per day, as temperatures will remain below normal.

He added, "On the contrary, we see a similar decline from non-LDZ sources of power, mainly gas, as wind energy generation is improving slightly."

LSEG data revealed that the non-LDZ forecast was down 171 GWh/d to 2438 GWh/d for the day ahead.

Elexon data shows that the peak wind power forecast for Britain is 11.13 gigawatts (GW) on Wednesday, rising to 19.15 GW by Thursday.

After the completion of work on the Troll gas field and the end of outages at Njord's gas platform, total Norwegian exports rose by 34 mcm/day to 318 mcm/day. Sergei Tsivilev, Russian Energy Minister, said that his country intends to increase LNG exports from its Arctic LNG 2 and Sakhalin 2 project to China.

Analysts from Engie's EnergyScan have said that it could help to keep European gas prices down.

The benchmark contract on the European carbon markets was down by 0.95 euros at 74.77 euro per metric ton.

(source: Reuters)