Prompt contracts on the Continental European gas markets extended gains Tuesday morning following Monday's strong surge in prices ahead of cold expected weather, before trading down from mid-morning to change hands midday at similar levels to the previous close.
The TTF day-ahead rallied up Eur1.75 to Eur24.25/MWh at Monday's close before trading up to highs of Eur24.90/MWh mid-morning Tuesday. But the pricing levels proved unsustainable and the contract traded down to change hands flat to its previous close midday.
"The early gains were a knee-jerk reaction to the coming colder weather," a trader said, "But the system is not particularly short given the relatively warm October temperatures so this has capped potential gains for now," he added.
Temperatures are expected to cool to 2 - 6 degrees Celsius below the seasonal norm across major European cities by Thursday, and remain cool for the weekend, according to data from forecaster CustomWeather.
The UK's NBP system opened finely balanced this morning with increased flows from the Netherlands via the BBL pipeline at 20 million cubic meters/day while UK-Belgium Interconnector nominations were heard at 39 million cubic meters/day.
The German NetConnect and GASPOOL day-ahead contracts narrowed the 60 euro cent gap between them at Monday's close to trade midday at Eur24.35/MWh and Eur24.50/MWh respectively.
Although the NCG day-ahead traded up to fall in line with GASPOOL's close of Eur25.00/MWh mid-morning, the contract shed value again to trade slightly below its previous close. GASPOOL dropped 50 euro cent Tuesday morning, following the previous day's Eur1.50 gains.
The French PEG Nord contract also softened slightly, moving down 20 euro cent to Eur24.35/MWh.
On the forward curve, gas continued to trade down as Brent crude prices lost value for a second consecutive day on macroeconomic concerns.
Front month ICE Brent slipped below the $110/b, losing $1.05 to trade at $109.11/b and dragging the TTF Cal 12 contract down 50 euro cent from its previous close to Eur25.90/MWh midday.
