LONDON: British and Dutch wholesale gas prices extended losses on Tuesday on softer demand as mild weather spread over the United Kingdom and northwest Europe and as the continent continues to receive solid supply of liquefied natural gas (LNG).

In the British gas market, the contract for immediate delivery fell by 40.00 pence to 20.00 pence per therm by 0900 GMT, its lowest level since August 2020.

The contract for next day delivery fell by 10.00 pence to 30.00 pence per therm, the lowest level since September 2020. The British gas system is 14.4 million cubic meters (mcm) oversupplied on Tuesday. In addition, consumption is expected to be lower on strong wind output and a warmer weather forecast.

In the Dutch gas market, the contract for next day delivery fell by 3.85 euros to 85.80 euros per megawatt/hour (MWh).

The benchmark front month contract fell by 2.45 euros to 91.15 euros/MWh.

A European gas trader said that LNG prices at the benchmark Japan Korea Marker (JKM) were high so gas prices cannot drop much, provided that no negative news on security of supply emerges and that LNG and Russian supply remain solid.

Analysts at Engie’s EnergyScan said a drop in coal prices added further pressure on prices.

The forecast of a warmer than normal June might provide an additional moderate bearish driver, according to Refinitiv analysts.