EUROPE GAS-Contracts open lower but hold near 4-year highs

OSLO, Oct 15 (Reuters) - Benchmark Dutch and British wholesale gas prices opened lower on Thursday amid softer demand forecasts but could reverse initial losses, as geopolitical tensions, low storage levels and competition with Asia for liquefied natural gas (LNG) supply remain concerns.

The benchmark Dutch front-month contract at the TTF hub was lower by €1.49 to €85.65 per megawatt hour (MWh) by 0754 GMT, ICE data showed.

The British front-month contract fell by 3.43 pence to 212.58 pence per therm.

However, they remain at levels not seen since December 2022.

"We again open with price falls and the question is if it will last today," analysts at Mind Energy said in their daily report.

Prices also opened lower on Wednesday but ended the day flat as storage concerns and geopolitical uncertainty overshadowed bearish signals such as milder weather forecasts, they added.

European gas demand looked a little softer across the next two weeks compared with the previous forecast, while the 46-day weather forecast has been revised warmer for the first half of November, LSEG analyst Yuriy Onyshkiv said.

Two ships sank near the Strait of Hormuz after being hit by projectiles amid a surge in attacks, maritime officials said on Wednesday. Neither carried LNG but the incidents highlight the persistent risk to shipping in the region.

Meanwhile, China, the world’s top LNG buyer, is stepping up purchases in a sign that it is beginning to replenish inventories ahead of winter, Daniel Hynes, senior commodity strategist at ANZ, said in a daily report.

"This spells trouble for European buyers, who will be competing for increasingly scarce LNG cargoes," he added.

Europe’s gas storage sites are 74.02% full, Gas Infrastructure Europe data showed, well below historical levels for this time of the year.

Norwegian natural gas exports are nominated at 330.7 million cubic metres (mcm) per day on Thursday, down from 334.2 mcm/day on Wednesday, data from gas infrastructure operator Gassco showed.

In the European carbon market, the benchmark contract was down €1.08 at €86.06 per metric ton.