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EURO GAS: Prompt prices fall in line with oil, euro currency

https://www.chemnet.com   Mar 11,2011 Platts
Prompt prices on the European continent dipped down midday, London time, Thursday following the easing back of oil prices.

Concerns over the euro caused the price of Brent to dip almost $2/barrel to around $114/b at 1300 GMT despite continued unrest in Libya.

The TTF day-ahead contract fell 20 euro cent day-on-day to trade midday at Eur23.05/MWh. The TTF front month reacted to the bearish sentiment, falling 35 euro cent from the previous day's close to change hands midday flat to the day-ahead at Eur23.05/MWh.

"We may begin to see spreads between UK and TTF gas prices narrow from yesterday's 18 euro cent price difference if the euro remains weak," a trader said. "For now the bearish oil price is weighing on gas prices on the continent."

The German markets followed the TTF down. The German NetConnect day ahead lost 20 euro cent from Wednesday's close, while the GASPOOL prompt contract slipped 30 euro cent over the same period. The contracts traded midday at Eur23.15/MWh and Eur22.90/MWh respectively.

Day-ahead prices in Austria's Baumgarten market remained unchanged from the previous day's close at Eur24.50/MWh midday.

Adding to the bearish sentiment on the prompt is expected mild weather conditions across the European continent. According to forecaster CustomWeather, temperatures in most European capitals will be above the seasonal norm for the next five days. Supply levels in much of Europe are considered healthy at present which has further dampened demand.

The largest day-on-day losses were seen as a result of the weaker oil price which pushed the forward curve down. The TTF cal 12 contract fell 45 euro cent from Wednesday's close to trade at Eur25.10/Mwh at midday.

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