EUROPE GAS - European prices drop on warmer and windier weather
The Dutch and British gas price continued to drop on Friday as the forecast of warmer and windier weather for next week reduced demand and tightened up the spread between United States gas delivery and Dutch prices.
LSEG data shows that the benchmark Dutch front-month contract was lower by 0.32 euros, or $9.26/mmBtu at 1025 GMT.
Data showed that the U.S. Henry Hub front-month contract fell by 0.10 euros to 14.73 euros/MWh or $5.03/mmBtu.
The U.S. Natural Gas Futures are trading at 35-month highs, on the back of near-record gas flows to LNG export plants. Extreme cold is also driving up heating demand and reducing the gap between EU and U.S. markets.
The Dutch day-ahead contracts was down by 0.27 euros to 26.93 Euros/MWh.
The British gas price for the day ahead fell 0.60 pence, to 75.50 cents per therm.
Ulrich Weber, LSEG's analyst, said that the weak outlook for next week and the expected decline in demand continued to drive down European prices. The temperatures are expected to increase dramatically, and wind power is expected to more than triple by Monday, he added.
LSEG data shows that German wind power production is expected to increase by 23.2 gigawatts on Monday to 28.8 GW. Meanwhile, British wind power is projected to be 12.6 GW.
Gas storage in Europe is likely to be reduced due to a weaker demand.
In a daily note, analysts from Engie's EnergyScan stated that "Net gas storage withdraws fell slightly yesterday. They are expected to fall again today before a larger drop next week."
Gas Infrastructure Europe has released the latest figures showing that Europe's storage sites for gas are nearly 84% full.
The benchmark contract on the European carbon markets fell by 0.01 euros to 82.42 euro per metric ton.
(source: Reuters)
