EUROPE GAS-European gas prices are soaring on the back of mild weather and strong supply

The Dutch and British electricity prices were in a tight range on Tuesday, as the mild weather kept heating demand low and amid a strong supply of LNG and natural gas from Norway.

LSEG data shows that the benchmark Dutch front-month contract was up 0.04 euros at 31.05 Euro per megawatt hour (10.53/mmBtu) at 1032 GMT.

The Dutch day-ahead contracts was down by 0.14 euros at 30.30 Euro/MWh.

The British day-ahead price of gas was down 3.75 pence, at 66.75 p/therm. And the front-month contract increased 0.47 pence, to 81.10 pence/therm.

LSEG data shows that temperatures in Northwest Europe will be mild for most of the week. However, on Wednesday they are forecast to increase by an average of 2.5 degrees Celsius, and then rise to 5 degrees Celsius higher than normal.

LSEG data shows that the local distribution zone demand (which refers to residential heating demand) will drop by 200 gigawatt hours per day on the next day.

"The system will probably switch to injections by tomorrow. The coming days are likely to remain soft. Ulrich Weber, LSEG analyst, said that our balance forecast for the coming two weeks remains largely unchanged in terms of total withdrawals.

Gas Infrastructure Europe's data shows that EU gas storage facilities were only 82,55% full last year, down from 93,53 % a year earlier.

As maintenance at Kvitebjorn is now complete, the flow of oil from Norway has increased by 8 million cubic metres per day.

Weber stated that "the strong global LNG supply and the soft demand are exerting a bearish pressure."

The benchmark contract on the European carbon markets was nearly flat at 79.59 euro per metric ton. (Reporting and editing by Clarence Fernandez; Marwa Rashed)

(source: Reuters)