European benchmark gas contract falls to its lowest since May 2021
LONDON, Feb 22 (Reuters) - The benchmark front-month contract at the Dutch TTF hub on Thursday hit its lowest intra-day level since May 2021, LSEG data showed.
The contract has fallen around 25% this year due to weak demand as strong output from renewables such as wind and solar have curbed gas demand from power plants.
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Milder than usual weather has hit demand for heating while industrial demand, which fell amid record high prices in 2022 following Russia’s invasion of Ukraine has also failed to fully recover, with many European plants implementing energy efficiency savings.
Analysts at Energy Aspects said they assume around 8% of European gas demand destruction will be permanent.
"Demand will remain structurally weak through summer and high stocks entering the injection season will limit injection demand," Energy Aspects said.
Europe's gas stores are currently around 65% full, latest data from Gas Infrastructure Europe showed.
The benchmark contract traded at an intra-day low of 22.81 euros per megawatt hour by 16.55 GMT, according to LSEG data, its lowest since touching 22.63 euros/MWh in May 2021.
(Reporting By Susanna Twidale; editing by Mark Heinrich and Jane Merriman)