Dutch and British gas contracts traded mostly a touch firmer on Tuesday, bouncing off technical support despite expectations of lower demand amid mild weather forecasts and steady supply by pipeline and from shipped liquefied natural gas (LNG).
The benchmark Dutch front-month contract at the TTF hub was up €0.29 at €31.55 per megawatt hour (MWh), or $10.74/mmBtu, by 09:40 GMT, LSEG data showed. It briefly traded at €31.14/MWh, its lowest level since October 3.
The Dutch day-ahead contract was up €0.40 at €31.35/MWh.
The British front-month gas price lifted by 0.38p to 79.22p per therm, and the day-ahead contract was up 1.47p at 77.75 p/therm.
On the day-ahead, a brief spell of lower wind and cooler temperatures lifted gas on Thursday already, LSEG’s gas research principal Wayne Bryan said.
"We continue to see strong support around €31/MWh, and this level could be tested today," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management (GRM) in a morning note.
However, a four per cent rise in US gas prices on Monday could provide some early support for TTF contracts on Tuesday morning, he added.
Still, higher wind power generation has dampened demand for gas, resulting in small net injections into fuel inventories, ANZ’s senior commodity strategist Daniel Hynes said in a daily note.
In addition, piped volumes from Norway and Algeria have increased and weather forecasts suggesting warmer temperatures should reduce heating demand into mid-November, he added.
The market also appears to believe that there was no need to worry as long as Europe continues to receive significant volumes of liquefied natural gas (LNG), analysts at Engie EnergyScan said.
EU gas storage sites were last 82.79 per cent full, compared with 95.21 per cent at the same time last year, Gas Infrastructure Europe data showed.
Global commodities trader Vitol’s head of LNG trading, Claudio Ribeiro, said storages are expected to stand at 35 per cent full by the end of the winter.
(Reporting by Nora Buli in Oslo)
