Prices mixed on milder weather, LNG supply concerns

LONDON, Jan 25 - Dutch and British wholesale gas prices were mixed on Thursday morning amid concerns over delayed shipments of liquefied natural gas (LNG), but strong inventories, milder weather and softer demand limited the upside.

The benchmark front-month contract at the Dutch TTF hub was up 0.39 euro at 28.40 euros per megawatt hour (MWh) by 0959 GMT, while the March contract inched up by 0.20 euro to 29.00 euros/MWh, LSEG data showed.

In Britain, the day-ahead contract fell by 1.00 pence to 69.00 pence per therm.

Attacks in the Red Sea by Iranian-backed Houthi militants on shipping vessels are disrupting the transport of goods and commodities to European countries, including Italy.

Qatar, one of the world's biggest LNG exporters, has informed Edison and other buyers in Europe as well as some British terminals where it has long-term capacity that it will delay or reschedule shipments after it decided to take a longer route via the Cape of Good Hope due to the conflict in the Red Sea, two trading sources told Reuters.

However, Qatar has not reduced exports to Europe so far and its exports are expected to be a bit higher than the levels seen in November and December, according to Kpler data.

"An extended shut-in of the Red Sea route from the Middle East poses a supply risk to Europe although the price impact will be delayed until Europe’s gas storage has been drawn down sufficiently," said Kaushal Ramesh, vice president at Rystad Energy.

Europe’s gas stores remains strong being 73.6% full, higher than the five-year average at this time of the year of 69%.

European average temperatures are set to rise to over 2.5 degrees Celsius above normal in the coming weeks, Rystad Energy added.

In the European carbon market, the benchmark contract rose by 1.45 euros to 64.37 euros a metric ton.