EUROPE GAS-Prices edge lower on warmer temperature forecasts

LONDON, Feb 12 (Reuters) - Dutch and British wholesale gas prices edged lower on Wednesday morning on warmer temperature forecasts after reaching a fresh two-year high on Tuesday.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was down 0.67 euro at 55.78 euros per megawatt hour (MWh), or $16.95/mmBtu, by 0929 GMT, according to LSEG data.

The contract remained well below an intra-day high of 59.27 euros/MWh reached on Tuesday, its highest level since February 2023.

The Dutch April contract TRNLTTFMc2 was down 1.15 euros at 56.45 euros/MWh.

In Britain, the front-month contract TRGBNBPMc1 was down 2.7 pence at 136.25 p/therm.

“The latest 15-day temperature forecast is bearish, adjusting up for 15-21 Feb,” LSEG analyst Saku Jussila said in a daily research note.

Analysts at Auxilione said a number of bearish factors were also weighing on the market on Wednesday including less cold temperature forecasts and a report in the FT the European Commission could be considering a new price cap.

“Those factors may have forced the hand of some players holding long positions to take their profit and exit positions,” Auxilione said.

A senior EU official told Reuters on Wednesday the price cap idea was not being considered.

Analysts at BNP Paribas said the recent gas price gains looked overdone.

“We believe the market is pricing in a scenario where the European winter turns out worse than expected while the APAC (Asia-Pacific) summer turns out to be as inelastic as in 2024,” BNP Paribas analysts said in a research note.

"We think both suppositions are wrong and hence don’t see a fundamental justification for current prices," the analysts added.

In the European carbon market CFI2Zc1, the benchmark contract was down 1.52 euro at 81.07 euros a metric ton.