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WEEKLY – Gas prices to ease on mild weather, strong supply

(Montel) German gas prices looked set to fall this week amid a combination of mild weather forecasts and healthy supply.

Day-ahead prices on the domestic THE hub averaged EUR 28.27/MWh last week at one broker, down from EUR 29.29/MWh the week before.

On Friday, the front-month contract closed at EUR 27.05/MWh, EUR 2.81 lower on the week.

Traders pointed to bearish fundamentals with high storage levels, mild temperatures and the increased availability of pipeline gas from Norway following unplanned outages last week.

Temperatures should average 5.1C above normal this week at 7C, unchanged from last week, data from Montel’s Energy Quantified (EQ) showed.

German domestic gas storage facilities stood at 72.7% of capacity on Friday, 1.5 percentage points lower week on week, according to data from Gas Infrastructure Europe.

Gas flows from Norway to Germany fell around 5.1mcm last week to average 139.6mcm/day, according to data from TSO Gassco.