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Germany: Natural gas prompt and near curve firm on injections and technical buying

09 May 2012 18:44:30 | esgm

Prompt prices at the German natural gas markets edged slightly higher on Wednesday in the absence of any new market drivers, while the near curve firmed as traders engaged in technical buying.

Both NCG and GASPOOL Day-ahead products closed the session €0.10/MWh firmer day on day, having lacked direction for the majority of the session. NCG Day-ahead traded at €24.90/MWh, retaining a €0.15/MWh premium over its TTF equivalent.

NCG Day-ahead traded in a tight range of €24.80-25.00/MWh throughout the session, moving sideways as fundamentals remained broadly unchanged. The rest of the curve followed suit until shortly before the close, when a wave of technical buying breathed some bullish life into the hub.

One trader told ICIS that the bullish near curve was the result of a correction after Tuesday's subdued session, while the latest WSI forecasts, showing temperatures to be slightly cooler across northwestern Europe, also allowed the prompt to firm.

While traders agreed that the market lacked direction, several leaned towards bullish positions in the short term, given the rate of storage injections in recent days.

Since the turn of the month, 430Mm³ of gas has been injected into storage at German facilities. This has allowed spot prices to remain firm, as capacity holders seek to capitalise on arbitrage opportunities by storing gas and withdrawing it later in the year.

"There are now so many injections into storage, and Norway cannot keep on flowing gas at this level. I would be bullish in the upcoming weeks," one source said.

The Austrian Day-ahead contract erased Tuesday's gains in a bearish session. The contract opened at €26.85/MWh, but was then sold down to €26.15/MWh. It then rebounded to last deal at €26.60/MWh shortly after the close. Only small volumes were traded on the market, and those who wanted to execute larger deals struggled, according to a source. June '12 attracted some buying interest, trading higher than Day-ahead. JE/KZ

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