EUROPE GAS - European prices drop on less cold weather forecast

The Dutch and British gas contract fell on Tuesday, as some weather forecasts indicated a potential?quicker ending to a winter cold spell? and that the supply remains stable.

LSEG data shows that the benchmark Dutch front-month contracts at?the TTF hub were down 0.41 euros at 27.36 Euro per megawatt hour or $9.47/mmBtu by 1005 GMT.

The Dutch day-ahead contracts was down by 0.38 euros at 27.27 Euro/MWh.

The British gas front-month contract was 1.55 cents lower at 72.00 pence per thermo.

Saku Jussila, LSEG analyst and a member of the European Centre for Medium-Range Weather Forecasts Ensembles, said that the latest ensembles 'forecast' has shifted to normal levels for first week in January. This was previously expected as a chilly spell.

He added that there was still some uncertainty, as other models continue to indicate colder temperatures.

LSEG data revealed that the local distribution zone demand - for gas in Northwest Europe, which mainly reflects heating requirements - will increase from 4,287 GWh/day on Tuesday to 4,787 GWh/day during working days next weekend.

Non-LDZ in the region will also increase from 2,805 GWh/day up to 3,138 GWh/day.

Gassco data showed that the supply of Norwegian pipeline gas to Europe and Britain was 343.5 million cubic meters per day on Tuesday. This is an increase of 2 mcm from day to day.

LSEG's Jussila said that while there may be a slowdown of liquefied gas cargo arrivals during the holidays, there will still be a lot available in January.

Gas Infrastructure Europe's data shows that EU gas storage sites are currently 66.89% filled.

The benchmark contract on the European carbon markets was up by 0.31 euros at 87.79 euro per metric ton. (Reporting and editing by Nora Buli)

(source: Reuters)