EUROPE GAS-Prices mostly lower on Norwegian flows, wind output

EUROPE GAS-Prices mostly lower on Norwegian flows, wind output

LONDON, May 28 – Dutch and British wholesale gas prices mostly declined on Tuesday morning on higher Norwegian exports and above-normal wind power output.

The benchmark front-month contract at the Dutch TTF hub was down 1.43 euros at 33.80 euros per megawatt hour (MWh) at 0755 GMT, according to LSEG data.

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The July contract was down 1.00 euro at 34.10 euros/MWh, while the British month-ahead contract inched down by 0.45 pence to 81.60 pence per therm.

Flows from Norway are rebounding following outages and the current maintenance schedule from the start of June will have a negligible impact from some small planned outages, said Wayne Bryan, head of European gas research at LSEG.

Wind output in Britain is set to remain above normal levels until at least June 4, while north-west European wind output is forecast to drop below normal from May 30 to June 1, LSEG data showed.

Higher wind generation typically reduces demand for gas from power plants.

However, there is some risk around liquefied natural gas (LNG) supply, said analysts at Engie EnergyScan.

“Even if they have fallen in the past weeks, LNG flows to Asia remain high and they could increase further as summer power demand increases in the region,” they said.

“The resulting drop in LNG flows to Europe could tighten the European gas balance. We can understand in these conditions that market participants are hesitant to be truly bearish on European gas prices,” they added.

In the European carbon market, the benchmark contract was down 1.35 euro at 74.90 euros per metric ton.

(Reporting by Nina Chestney)