EUROPE GAS - European prices are down on a milder outlook, but winter risks still remain
Dutch and British gas opened lower on Monday morning. The current cold snap is expected to last only a short time, but winter risks remain due to the reduced storage year-over-year and the reliance on LNG imports.
LSEG data shows that the benchmark Dutch front-month contract was lower by 0.20 euros at 31.72 Euro per Megawatt Hour (MWh), which is $10.79/mmBtu at 0804 GMT.
The Dutch day-ahead contracts was down by 0.65 euros at 31.98 Euro/MWh.
The British day-ahead contracts fell by 0.8 pence, to 81.20 cents per therm.
In a morning report, Mind Energy's senior analyst Karsten Nielsen said that the market opened lower due to a forecast of mild weather for the end October.
Nielsen said that the gas market had not yet reacted to President Donald Trump's threats of 100% tariffs against Chinese exports going to the United States.
Georg Mueller, LSEG's meteorologist, said that this week would be cool and dry. Next week will bring more rain and temperatures near or above average.
Yuriy Onyshkiv, LSEG's analyst, said that despite the ongoing French strike, lower LNG prices and higher demand for heating and electricity generation helped to support the Dutch outlook.
Operator Elengy has said that strikes will continue to affect the sending out of LNG from Fos Tonkin, Fos Cavaou and Montoir until respectively Wednesday and Thursday.
Analysts at Timera Energy wrote in a report that "European hub prices will likely remain somewhat supported until Q4 2025." They added that Europe continues to bid aggressively on LNG cargoes, rather than relying solely on storage withdrawals.
Analysts said that the continent had around 10 million fewer tonnes of gas in its storage than a year earlier, leaving little room for withdrawals if the winter was cold.
Gas Infrastructure Europe's data shows that EU gas storage sites are currently 83% full compared to 94.9% last year.
The benchmark carbon contract in Europe was down by 0.64 euros at 79.04 euro per metric ton. Nora Buli, reporting from Oslo; Eileen Soreng, editing)
(source: Reuters)