EUROPE GAS - European prices are expected to ease due to forecasted milder weather and a plentiful supply

Dutch and British gas rates fell on Thursday morning as the weather forecasts for the next week were milder, and steady LNG arrivals maintained supply levels.

The benchmark Dutch front month contract at the TTF Hub was down 0.21 euros at 31.49 Euro per megawatt-hour (MWh), $10.62/mmBtu by 0846 GMT and its lowest level since Friday, LSEG Data showed.

Gas prices in the UK for the day ahead fell by 0.95 pence, to 76.35 cents per therm. The front-month contract was down 0.77 pence at 82.30 cents per therm.

Saku Jussila, an analyst at LSEG, said that the average daily gas consumption in Northwest Europe for working days is expected to be down by 350 gigawatt-hours (GWh). The forecasts for next week are also milder, according to the latest forecasts.

He added, "We expect a second day of sideways-bearish trades on the warmer temperatures forecast."

Jussila stated that the LNG terminal arrival schedule looked good for the next couple of weeks.

In a recent note, Daniel Hynes said that the import terminals of northwest Europe were sending fuel to local grids on a level not seen since March. This is due to strong LNG imports.

He added that despite the early start of heating season in Europe, Europe's total gas inventory levels remained at 83%.

Gas Infrastructure Europe data shows that this is still 12 percentage points lower than the previous year's level.

Analysts at ING stated that the EU gas balance is vulnerable this winter due to the lower storage levels. However, the market does not appear overly concerned, as shown by the lack of interest among speculators.

The latest positioning data revealed that investment funds reduced their net long positions in TTF from 24.8 Terawatt Hours (TWh), over the past week, to 21.4 TWh. This is the smallest position held by net long since March 2024.

The benchmark carbon contract in Europe was down by 0.98 euros at 80.51 euro per metric ton. Nora Buli, reporting from Oslo; Sumana Niandy, editing)

(source: Reuters)