Gas prices in Europe are expected to fall due to mild weather.

The Dutch and British wholesale gas prices fell on Wednesday morning as the milder weather and forecasts of windy conditions reduced demand and eased fears over storage depletion.

The benchmark Dutch 'front-month contract' at the TTF hub fell?0.74 euro?to 29.70 euros per Megawatt Hour (MWh), which is $10.30/mmBtu by 0901 GMT. This was its lowest level since 12 January, according to LSEG data.

Arne Lohmann-Rasmussen, Global Risk Management's chief analyst, noted that softer forecasts for the weekend, and the remainder of the month combined with a reduced geopolitical premium, had a negative impact on the prices. The progress in negotiations between Iran and the United States also reduced the risk of a closing of the 'Strait of Hormuz' or a disruption of LNG supplies from Qatar into the global market. Iran temporarily shut down a key shipping choke-point?for military exercises on Tuesday.

Daniel Hynes is a senior commodities strategist with ANZ Research. He said that forecasts of warmer weather also help ease concerns about low inventories.

Gas Infrastructure Europe's data shows that EU gas storage sites are currently 33% full. This is the lowest level since 2022 and 11 points lower than last year. The German economy ministry announced on Tuesday that storages in Germany are only 23% full. This is the lowest level since at least 2011. However, this is still above the legal thresholds and gas supplies remain secure.

Analysts at Engie Energyscan stated that a continued increase of wind power production should also 'limit gas demand for electricity generation, improving the European gas balance.

The British gas day-ahead price fell 2.50 pence to 70.50 pence.

The Dutch day-ahead contracts was up 0.67 euros to 30.60 euros/MWh.

The benchmark contract on the European carbon markets was down by 1.07 euros, at 69.02 euro per metric ton. (Reporting and editing by Nina Chestney; Nora Buli)

(source: Reuters)