Prices move sideways amid warm weather, strong inventories

LONDON, May 9 - Dutch and British wholesale gas prices moved sideways in a tight range on Thursday morning, amid forecasts of lower demand due to warmer weather and solid inventories across Europe.

The benchmark front-month contract at the Dutch TTF hub rose by 0.33 euro to 31.03 euros per megawatt hour (MWh) by 0824 GMT, according to LSEG data.

The Dutch day-ahead contract was up 0.3 euros at 30.6 euros/MWh.

In the British market, the day-ahead price was down 0.4 pence at 74.00 pence per therm, and the within-day contract eased by 0.3 pence to 73.85 p/therm.

"Some warmer days yet to be enjoyed in the days ahead still, before looking to settle close to seasonal normal early next week and thereafter," consultancy Auxilione said in a morning note.

The temperature forecast for Northwest Europe suggests a rise from Thursday onwards, from close to seasonal norm at about 13 degrees Celsius to 17 C on May 13, LSEG data showed.

LSEG analyst Ulrich Weber said demand for heating is soft over the coming days, and as gas for power demand is expected to weaken from the day ahead. Combined with higher supply, this should result in a rise in injections into storage and exports to the continent over the weekend.

European gas storage facilities were last seen 62.8% full, according to Gas Infrastructure Europe (GIE) data.

Daniel Hynes, senior commodity strategist at ANZ bank said in a daily note that with storage facilities at seasonal highs, there is little incentive to compete with Asia for LNG; however, the risk of supply disruptions remaining high amid the Russia-Ukraine war could quickly change this.

North Asia LNG prices edged lower, following a rise on Wednesday, after China’s biggest LNG importers, including CNOOC and PetroChina, offered to sell spot shipments for delivery over the summer, suggesting the region is not in dire need for more supply, Hynes said.

In the European carbon market, the benchmark contract was up by 0.37 euros at 72.06 euros per metric ton. (Reporting by Marwa Rashad; editing by Susanna Twidale)