Netherlands: Prompt and curve shed value as fundamentals stay bearish
The TTF continued to shed value on both the prompt and the curve on Wednesday. Fundamentals in the market remain bearish according to traders.
Above-average temperatures combined with a long system have depressed prices on the prompt, one trader said. Temperatures are expected to remain 4-6˚C above average for the next five days.
On the prompt, Day-ahead lost €0.25/MWh session on session. The contract started trading at €23.225/MWh in the morning, shedding value for most of the day to reach an intra-day low of €22.25/MWh. It consequently closed at €22.35/Mwh. Trading activity on the Weekend contract was limited and no trade took place on WDNW.
The front month continued to trade at more than €1.00/MWh discount to the summer contract on Wednesday, which provided an opportunity for traders with storage capacity to buy gas for injection.
Storage fullness levels have increased by 0.11% in the TTF area according to data from Gas Storage Europe.
On the curve, Summer '11 and Winter '11 lost €0.25/MWh and €0.30/MWh respectively. Prices on the curve have been partly affected by dropping German power prices, according to a source.
Concerns about Middle East events and possible diversions of LNG are still in the market, but none of these issues are currently affecting European supplies, which contributes to a bearish sentiment, at least on the spot, another trader noted. "There is a strong contango in the market," the trader added.
"Some traders may just be long after the run in the past sessions, and other have shortened their positions already, anticipating a correction in prices, but you won't find big shorts out there," another source said. CF
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