European gas prices increased slightly on Thursday, but the market trend continues to be influenced by the improving supply picture from Norway, low demand and high storage levels across the continent.
According to Energi Danmark, day-ahead prices reached the lowest level in five weeks, losing 20% over the week. This came as the Norwegian supply outlook improved and limited demand for gas in northern and western Europe on the back of normal temperatures prevailed.
The TTF was 0.5% up to USD 8.73/MMBtu, while NBP gained a minor 0.3% settling at USD 8.44/MMBtu.
Meanwhile, extreme heat is reported to be persistent through southern Europe and parts of Germany, with the next blast from the Sahara lifting temperatures toward record highs in parts of Italy this weekend. As a result, this might raise demand for other sources of electricity generation.
Henry Hub in the US returned to a decline on Thursday and was down 3.3% to USD 2.55/MMBtu.
The price decline occurred despite another daily drop in output and forecasts for hotter-than-normal weather to continue through late July, especially in Texas.
In addition, the EIA’s latest inventory report showed continued lofty supplies in underground storage, with the print for the week ending 7 July overshadowing forecasts for intense heat through the rest of July This pushed the prompt month lower for a second straight day.
Injections for the week were 49 Bcf, compared to 59 Bcf injected this time last year and a forecast of 42-63 Bcf.
Crude prices continued to strengthen on Thursday, now at their highest in nearly three months after US inflation data suggested interest rates in the world's biggest economy were close to their peak, Reuters reported.
Brent settled 1.6% higher at USD 81.36/MMBtu and WTI was up 1.5% to USD 76.89/MMBtu.
However, the International Energy Agency (IEA) reported that oil demand is set to hit a record high this year as the market is tightening but also noted that economic headwinds and interest rate hikes have deflated growth expectations slightly.
It said that while demand is expected to reach 102.1 million barrels/d, the forecast for growth was lowered by 220,000 barrels/day, to 2.2 million barrels/d.
Front-month futures and indexes at last close with day-on-day changes (click to enlarge): 
Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.
