Prompt contracts on the Continental European gas markets managed to reclaim a small share of the previous day's heavy losses by Thursday midday, but as bearish sentiment persists traders expect further losses by the day's end.
The restart of the UK-Belgium Interconnector Thursday morning sparked a dramatic move down for day-ahead contracts at the previous close. Losses were amplified by low exports from the Netherlands to the UK through the BBL pipeline, traders said.
Although Thursday morning saw BBL flows into the UK ramp up from zero to around 22.5 million cubic meters/day, alleviating some of Wednesday's downward pressure, prompt prices remain under bearish influence of negative economic factors and a glut of available gas.
"Gas prices have, for the most part, resisted the current economic gloom but it is becoming harder and harder to do so," a trader said.
"The recession remains a problem with industrial gas demand expected to slip and, coupled with negative data from China, commodities are expected to give way under bearish sentiment."
The Dutch TTF day-ahead lost Eur2.30 at Wednesday's close to trade at Eur22.05/MWh, and although prices reached morning highs of Eur22.75/MWh, following higher BBL exports, the contract slipped back to Eur22.40/MWh midday.
The German markets showed a similar pattern with the NetConnect day-ahead rising to Eur22.70/MWh Thursday morning but sinking back to Eur22.50/MWh midday, up 55 euro cent from the previous close.
The less-liquid GASPOOL day-ahead contract was heard midday at 10 euro cents above Wednesday's close of Eur22.40/MWh.
On the forward curve gas contracts remain shackled to falling crude prices, extending the previous day's losses by midday.
At 1010 GMT, November ICE Brent was trading down $2.47/b from Wednesday at $107.89/barrel, following comments from US Federal Reserve Chairman Ben Bernanke's late Wednesday that the US economy faced "significant downside risks."
The TTF Winter 12 contract was heard midday at Eur28.55/MWh down 45 euro from the end of Wednesday, while the Cal 12 changed hands at a 35 euro cent discount day-on-day at Eur27.25/MWh.
