Dutch and British gas contracts fell on Tuesday morning with some weather forecasts indicating a potentially quicker end to a cold spell, and as supply remains stable.

The benchmark Dutch front-month contract at the TTF hub was down 0.41 euro at 27.36 euros per megawatt hour, or $9.47/mmBtu, by 1005 GMT, LSEG data showed.

The Dutch day-ahead contract was down 0.38 euro at 27.27 euros/MWh.

The British front-month gas contract was 1.55 pence down at 72.00 pence per therm.

The latest European Centre for Medium-Range Weather Forecasts ensembles forecast has shifted towards normal levels for the first week of January which was previously expected as a cold spell, LSEG analyst Saku Jussila said.

However, there is still some uncertainty, with other models still implying colder conditions, he added.

Local distribution zone demand for gas in northwest Europe, which mostly reflects heating needs, will rise from 4,287 gigawatt hours per day on Tuesday to 4,787 GWh/day for working days next week, LSEG data showed.

Non-LDZ demand in the region, which indicates demand from the power sector, will also rise from 2,805 GWh/day to 3,138 Gwh/day.

Supply remains healthy meanwhile, with nominations of Norwegian pipeline gas supply to Europe and Britain at 343.5 million cubic metres per day on Tuesday, up 2 mcm day on day, data from infrastructure operator Gassco showed.

While there should be a slowdown in liquefied natural gas cargo arrivals over the holiday period, there should be plenty of cargoes available in January, LSEG’s Jussila said.

EU gas storage sites were last 66.89% full, Gas Infrastructure Europe data showed.

In the European carbon market, the benchmark contract was up 0.31 euro at 87.79 euros a metric ton.
Source: Reuters