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Netherlands: TTF natural gas prompt and curve rebound as Summer strength fuels injections

13 Mar 2012 18:59:13 | esgm

The TTF natural gas prompt and curve rebounded on Tuesday, defying bearish expectations with all contracts posting session-on-session gains.

The largest gains were registered on the Day-ahead product, which clawed back much of the value shed in Monday's session.

The contract and the other spot products failed to heed mild weather expected for the rest of this week. WSI's forecast shows temperatures ranging between 24°C above normal in central and western Europe, yet TTF Day-ahead gained €1.35/MWh day on day.

The contract first traded at €23.60/MWh in the early morning, and traded at roughly this level until the afternoon, at which point its stock began to rise. A flurry of buying activity saw its value climb, and five minutes before the close, it reached a high of €23.45/MWh, before interest subsided slightly.

A similar pattern was reported across other European gas hubs. The euro's relative weakness against the pound was the common refrain from traders in justifying the bullish session. While the NBP also firmed in a late rally, its gains were tempered somewhat as the pound gained 1% against the euro.

While some sources said that the losses in the previous session were overdone, one trader dismissed the theory that the euro's strength led to the Dutch hub's gains. "The prompt has firmed because of the strength further out on the curve," he said. "Traders are injecting gas again, because of summer's premium over the prompt. With the mild weather, it's a logical move."

With the advent of the summer season fast approaching, sizable injections have been recorded at Dutch and German storage facilities. On Monday, almost 34 million cubic metres (Mm³) of gas was injected to storage in these countries. Only 19Mm³ was withdrawn on the same day. JE

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