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Netherlands: TTF natural gas spot prices down, but supported by strong buying interest

08 May 2012 19:41:21 | esgm

The Dutch natural gas Day-ahead lost value, but remained relatively resilient compared with the equivalent contract in the UK. Far-curve contracts edged lower on softer oil prices.

Day-ahead closed Tuesday at €24.60/MWh. It shed €0.40/MWh session on session, compared with the falls on the NBP equivalent, which closed €1.41/MWh lower than Friday.

"Dutch prices have been holding up fairly well compared to the prices in the UK, as the latter was pretty long this morning," one source said.

Despite mild weather and relatively healthy supply, strong buying interest was reported on TTF prompt. "The buyers are not letting the spot prices fall any lower," another market participant said.

Some suggested that the storage players were mostly on the buy side because the winter quarters have held up better than the spot prices, making it attractive to inject. Winter '12 fell only by €0.10/MWh, placing it at a €2.90/MWh premium over current spot prices.

It was also suggested that the weakening euro has lent support to the TTF spot.

Net injections for Netherlands exceeded withdrawals by 2.51Mm³ according to Gas Storage Europe data and sources expected this to last well into Q3 '12. The Dutch storage fullness is up by 3% week on week. Some traders suggested that market participants were injecting into storage as the Q3 '12 contract holds a slight premium of €0.30/MWh over the Day-ahead contract. "There are still a number of uncertainties surrounding the summer contract, Q3 '12 can still blow out," one source said. Yet others were not convinced at the bullish outlook for summer.

Far-curve prices were edging lower depressed by a downward trend on the oil market as Brent crude front-month lost $1.00/bbl intra-day. SR

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