Gas prices in Europe are rising on a weak wind ahead of the US election
The Dutch and British wholesale prices of gas rose slightly Tuesday morning due to a weak wind and in anticipation of what should be a close U.S. Presidential election.
LSEG data shows that the benchmark front-month contract for the Dutch TTF hub at 0942 GMT was 0.37 euros higher, at 40.85 Euro per megawatt hour or around $13/mmBtu.
The British day-ahead contracts rose 1.15 pence, to 102.50 pence/therm. Meanwhile, the weekend contract increased by 1.40 pence at 101.25 pence/therm.
Gas traders said that the UK's prices are currently being supported by the fact that wind (generation) has been weak.
The trader said that there was also uncertainty because of the U.S. elections and the way the geopolitical situation could unfold.
Voters are expected to vote later today, but the results will not likely be known until days after the voting has ended.
According to LSEG, in north-west Europe the wind speed is expected to remain below 10 gigawatts for at least another 12 days and will not exceed normal until November 17.
Elexon data shows that Britain's peak generation of wind is expected to be 2.4 GW and 3.5 GW respectively today, from a total metering capacity of more than 20 GW.
Analysts at LSEG expect the price to range between 38-40 euros in the next few days.
Analysts at Bernstein say that, looking further ahead, the fundamentals of demand and supply point to a TTF price in January 2025 of $13.2/mmBtu for a normal winter. $13.5/mmBtu is expected with a colder winter. And $13.8/mmBtu if it's a very cold one.
They said that "over the next 6-8 month the EU should call for LNG: Europe will have to rely on increasing LNG imports to satisfy our projected gas demands, despite the high storage,"
The new LNG supply will not start until the second half of 25 or, due to delays in project implementation, possibly as late as 2026. If this winter is colder than usual, we estimate a deficit of 8 billion cubic meters (bcm) and a material 22.44 bcm if it's very cold.
The benchmark contract on the European carbon markets has increased by 0.17 euros to 65.39 euro per metric tonne.
(source: Reuters)
