Wind and LNG supply push down European gas prices

Dutch and British wholesale gas prices traded lower early on Thursday as wind power generation curbed gas-for-power demand and increased liquefied natural gas arrivals offset reduced supplies from Norway.

The benchmark Dutch front-month contract at the TTF hub was down €1.32  at €31.23 per megawatt hour, or $10.63/mmBtu, by 07:42 GMT, LSEG data showed. That was the lowest price in a week.

The British front-month gas price was down 2.55p at 78.21p per therm, while the within-day contract dropped by 2.65p to 78.35 p/therm.

Imports of liquefied natural gas have increased in parts of the European Union this week, notably in Germany and Italy, Daniel Hynes, senior commodity strategist at ANZ, said in a note, citing ship tracking data.

"This will help offset Norwegian flows, which are dipping due to seasonal maintenance," he added.

Wind generation in much of Northwest Europe is also set to increase, easing demand for gas, Hynes said. Non-local distribution zone gas demand in Northwest Europe, which consists of power stations and large industries, is forecast to drop from 2,206 gigawatt hours/day on Thursday to 1,692/GWh on Friday, LSEG data showed.

"The European market seems to be very comfortable with the current situation with looser storage targets and ample LNG supply, despite Norwegian maintenance ramping up," LSEG analyst Saku Jussila said.

Nominations for Norwegian gas flows to Europe dropped from 281 million cubic metres per day on Wednesday to 273 mcm/day on Thursday, data from infrastructure operator Gassco showed.

EU gas storage sites were last 76.4 per cent full, compared with around 92 per cent at the same time last year, Gas Infrastructure Europe data showed.

(Reporting by Nora Buli in Oslo; editing by Barbara Lewis)