EUROPE GAS-Prices mixed on lower wind, strong inventories

EUROPE GAS-Prices mixed on lower wind, strong inventories

July 17 (Reuters) – Dutch and British gas prices were mixed on Wednesday morning amid an expected drop in wind speed across continental Europe, while storage build remains strong.

The benchmark front-month contract at the Dutch TTF hub was 0.23 euros lower at 32.78 euros per megawatt hour (MWh), or $10.45/mmbtu by 0859 GMT, LSEG data showed.

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The European gas market appears overall bearish, with a strong supply picture throughout the region and high storage levels across the continent, with limited upside, analysts at Energi Danmark said.

The Dutch day-ahead contract was up 0.14 euros at 32.67 euros/MWh.

The day-ahead contract did not break through any key resistance levels yesterday despite gaining almost 5% day-on-day, LSEG analyst Saku Jussila said.

“We expect a downward correction after the news-driven overreaction yesterday, even though there are a few bullish drivers for tomorrow,” he added.

In the British market, the day-ahead contract fell 1.45 pence to 74.75 pence per therm.

Gas for power demand is up 8 million cubic meters per day (mcm/d) due to wind speeds dropping on Thursday, LSEG’s Jussila said.

Wind generation was forecast at 4.9 gigawatts (GW) in Britain on Thursday, and is expected to remain around this level for the rest of the week, while German wind output was seen plummeting 12.4 GW to 3 GW, LSEG data showed.

Current wind generation in the UK is much lower-than-average while solar supply is increasing gradually. This is expected to be comfortably higher through the rest of the working week, Analysts at Northern Gas and Power said in an online note.

In the European carbon market, the benchmark contract fell 0.2% to 67.86 euros per metric ton.

(Reporting by Forrest Crellin; Editing by Marwa Rashad and Varun H K)