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EURO GAS: Prices rise on stronger oil and bullish fundamentals

https://www.chemnet.com   May 10,2011 Platts
Prompt prices on the Continental European gas markets have followed the bullish moves in oil prices Monday morning.

In addition, colder temperatures forecast for the end of the week coupled with reduced LNG deliveries to the UK and Belgium have bolstered demand and helped to support price gains.

"Oil prices continue to offer support to European gas markets following Friday's rally," a trader said, "But the markets are also looking forward to cooler temperatures at the week's end as well as fewer LNG deliveries to the UK and Belgium which is keeping demand healthy."

The Continent's most liquid gas trading hub, the Dutch TTF, heard gains across the prompt and forward curve Monday morning. The day-ahead contract traded up 15 euro cents from Friday's close to Eur22.80/MWh at midday, London time.

Germany's GASPOOL day-ahead traded flat to the TTF contract at Eur22.80/MWh having gained 45 euro cents over the morning's trade. The German NetConnect market saw its day-ahead contract trade at a slight premium to the TTF at Eur22.85/MWh.

The French PEG Nord contract moved up 45 euro cents to trade in line with the TTF and German markets at Eur22.85/MWh midday.

Prompt prices turned bullish in Friday's late trade due to the rise in oil prices. ICE June Brent crude extended its gains to $112.45/b mid-morning helping move the TTF forward curve higher from Friday's close.

The TTF front month gained 50 euro cents to change hands at Eur22.65/MWh at lunchtime, while the TTF Cal 12 gained 30 euro cents from the previous close to trade at Eur26.00/MWh.

Temperatures are currently above the seasonal norm across Europe, according to forecaster CustomWeather. But by mid-week forecasts predict cooler temperatures which will dip below the seasonal norm in Amsterdam and much of Germany by Friday.

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