Gas prices drop on profit-taking, but winter risks persist

Benchmark Dutch and British wholesale gas prices fell on Thursday morning as market participants took some profit after contracts rose to their highest since January 2023 and with no further escalation in U.S.-Iranian hostilities reported overnight.

The benchmark Dutch front-month contract at the TTF hub TFMBMc1 was down €1.73 at €71.90 per megawatt hour (MWh) by 0830 GMT, ICE data showed.

The British front-month contract NGLNMc1 was down 4.25 pence at 177.9 pence per therm.

The market is in a bit of panic as storage sites are very depleted, with no end to the U.S.-Iran conflict likely in the near term, MindEnergy analysts said in a morning report.

However, prices were retreating on Thursday morning in a correction from the steep rise over recent days, they added.

U.S. President Donald Trump said on Wednesday that the renewed campaign against Iran would not continue for "too long" after the biggest exchange of fire between the United States and Iran since July.

There was a lot of technical trading searching for opportunities to take profit as the market moves higher, one trader said, adding that higher prices towards the start of European winter were justified.

EU gas storage is currently 65% full compared with about 77% at the same time last year, Gas Infrastructure Europe data showed. Storage is only 53% full in Germany, which has Europe's largest storage capacity.

Forward prices do not offer incentives to store gas, Germany's INES association of storage system operators said on Thursday, calling on the government to cut levies and offer financing support to improve storage economics.

Meanwhile, Russian President Vladimir Putin said on Thursday that there is a chance of a peace agreement to end the war in Ukraine, but he also repeated comments describing Ukrainian attacks in Russia as "state terrorism".

In the European carbon market, the benchmark contract CFI2Zc1 was down €0.49 at €83.58 a metric ton.