Europe gas: Prices rise on cooler weather, LNG competition from Asia
Dutch and British wholesale gas prices rose in early trading on Friday morning amid forecasts of higher demand as temperatures cooled, and in order to remain competitive against Asian buyers of liquefied natural gas (LNG).
The benchmark Dutch front-month contract was up €0.70 at €32.80 per megawatt hour (MWh), or $10.88/MMBtu, by 0811 GMT, according to LSEG data.
The British weekend contract rose 1.72 pence to 79.00 pence per therm, and the day-ahead contract was up 3.85 pence at 79.50 pence per therm.
Dutch prices were posting small gains on Friday morning, likely seeing some support from Asian prices LNG prices, analysts at Engie EnergyScan said in a report.
Europe and Asia compete for cargoes and the recent drop in European prices is already seeing diversions of LNG cargoes to Asia.
"Next week, prices are likely to trade at a touch higher level following the end of this week's very warm weather," analysts at LSEG said in a weekly note.
Cooler weather is expected to lift local distribution zone (LDZ) demand in northwest Europe by 801 gigawatt hours (GWh) per day.
The British system faced tightness from more residential demand and a drop in Norwegian supply amid maintenance at the Kollsnes processing plant, LSEG said.
They forecast day-ahead prices to fluctuate in a tight €32–€33/MWh range for the TTF and around 80 p/therm for Britain.
Next week, the market will also follow negotiations between European Commission, Parliament and Council, on proposals to lower gas storage filling targets.
These proposals would suggest an aggregate European storage fill of 82 Bm3–83 Bm3, or 75%–76% full, compared with an average of 97 Bm3 over the 2016–2020 period and 105 Bm3 over 2022–2024, analysts at Energy Aspects said in a note.
"We caution that Europe is unlikely to only fill to these minimums, however, as that would introduce significant risk to prices for Q1 26," they added.
EU gas storage facilities are now 39.52% full, according to Gas Infrastructure Europe.
In the European carbon market, the benchmark contract rose by €1.53 to €68.55 per metric ton.
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