EU Gas Market Weakens on Mild Outlook, Ukraine Talks
Europe’s benchmark TTF natural gas price fell below €30/MWh for the first time since May 2024, pressured by warmer-than-normal weather forecasts and ongoing U.S.–Ukraine peace talks. While LNG supply remains strong, analysts say falling storage levels could limit further downside.
(Reuters) - The European benchmark contract fell below 30 euros for the first time since May 2024 on Monday morning, driven by forecasts of warmer-than-normal weather in the next two weeks and ongoing diplomatic efforts to end the war in Ukraine.
The benchmark Dutch front-month contract at the TTF hub TRNLTTFMc1 was down 0.99 euro at 29.25 euros per megawatt hour (MWh), or $9.88/MMBtu, by 0945 GMT, LSEG data showed.
It marks the lowest price since May 15, 2024.
The British day-ahead gas price was 2.00 pence lower at 77.00 pence per therm.
"Next week, and very likely also the week after next week, will be milder than normal and especially in the western and northern parts of our area also windy and occasionally wet," LSEG meteorologist Georg Mueller said.
Gas demand for heating for northwest Europe set to ease from 4,721 gigawatt hours (GWh) per day on Monday to 3,788 GWh/day for working days next week, LSEG data showed.
Ongoing talks between the United States and Ukraine over a revised plan to end the war with Russia are also weighing on wider commodities prices.
But it is hard to know what the outcome of the talks will be, with previous attempts having failed, said Ole Hvalbye, commodities analyst at SEB Research.
"I think the market is quite a long way away from seeing more Russian gas to Europe," he added.
While other gas supply to Europe has been healthy, with plenty of liquefied natural gas arriving, further downside is limited with current prices attractive for industrial buyers and falling European gas storage levels, Hvalbye said
EU gas storage sites were last 79.1% full, down nearly two points over the past week amid higher demand from cold weather, and compares with 88.3% full seen a year earlier, Gas Infrastructure Europe data showed.
In the European carbon market, the benchmark contract CFI2Zc1 was down 0.50 euro at 79.91 euros a metric ton.