Europe gas: Prices edge lower on strong wind power output
Dutch and British gas prices edged lower on Monday morning as expectations of strong output from wind farms curbed gas demand from gas-fired power plants.
The benchmark front-month contract at the Dutch TTF hub was down €0.12 at €31.58 euros per megawatt hour (MWh), or $10.09/MMBtu, LSEG data showed. The Dutch day-ahead contract was down €0.07 at €31.33 euros/MWh. In the British market, the front-month contract was down 0.17 pence at 72.98 pence per therm.
“Gas for power demand (in northwest Europe) is expected to be down 160 gigawatt (GW) hours/day on day ahead, which might add some bearish sentiment today,” LSEG analyst Saku Jussila said in a daily research note.
In Britain, peak wind power output is forecast at 4.6 GW on Monday, rising to 7.4 GW on Tuesday, Elexon data showed. However, prices have remained supported by several risk factors that could affect supply.
“If one of the risk factors were to materialize (e.g., stronger drop in LNG supply to Europe, drop in Russian flows through Ukraine, rebound in European gas demand), the price increase could be significant,” Engie EnergyScan analysts said. They said the market is monitoring operations at the U.S. Freeport LNG plant in Texas, where gas flows are resuming slowly after operations were halted before Hurricane Beryl hit the Texas coast.
“What we can say is that the volumes are currently too low to conclude that risk is over,” Engie EnergyScan said.
Maintenance at France’s Monitor LNG terminal was extended on Friday until Aug. 1, compared with a previous restart date of July 22.
In the European carbon market, the benchmark contract fell by €0.91 to €68.28 a metric ton.
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