UK and Dutch wholesale gas prices widened their losses on Tuesday due to milder demand due to mild weather in the UK and northwestern Europe and as the continent continues to receive a steady supply of liquefied natural gas (LNG), the Reuters agency.
In the UK gas market, the immediate delivery contract fell by 40 pence to 20 pence per British thermal unit, its lowest level since August 2020.
The contract for delivery the next day fell by 10 pence to 30 pence per British thermal unit, the lowest level since September 2020.
The British gas system has an oversupply of 14.4 million cubic meters on Tuesday. In addition, consumption is expected to be lower due to strong wind production and the forecast for warmer weather.
In the Dutch gas market, the contract for delivery the next day was reduced by 3.85 euros to 85.80 euros per megawatt hour.
The reference contract was reduced by 2.45 euros to 91.15 euros per megawatt hour.
A European gas trader said that the prices of LNG in the Japan Korea Marker reference contract are high, so the prices of gas can not be reduced much, provided that there is no negative news about security of supply and that LNG and Russian supply will remain stable.
Engie’s EnergyScan analysts said the fall in coal prices added further pressure on prices.
The forecast for a warmer-than-normal June may be an additional downside factor, according to Refinitiv analysts.
Meanwhile, gas flows east through the Yamal-Europe pipeline from Germany to Poland jumped on Tuesday, according to the Gascade pipeline operator.
In the European coal market, the reference contract increased by 0.27 euros to 87.29 euros per tonne.
Source: Capital
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