Gas prices in Europe rise on cold weather forecast
Dutch and British wholesales prices increased on Friday morning. They reached their highest level in over a week due to the expected cooler and less windy conditions in Europe.
LSEG data shows that the benchmark front-month contract for the Dutch TTF Hub gained 0.85 euro to 42.45 Euro per Megawatt Hour (MWh), which is $13.41/mmbtu by 0949 GMT.
This is the highest level of the contract since October 29.
The TTF day-ahead contracts rose further by 1,35 euros, to 42.40 Euros/MWh.
The British day-ahead contracts was up 3.35 cents at 107 cents per therm.
Ole Hvalbye, SEB Markets analyst, says that the gas market has seen a short-term increase in prices mainly because of updated weather forecasts.
He added that temperatures for the next ten days will be near seasonal norms, with a little colder weather farther out. Lower than normal wind energy generation should also increase the demand for gas.
The LSEG's Georg Mueller, a meteorologist, wrote that cold air from the east will arrive later next week. This will bring temperatures below normal and partly frosty evenings.
Analysts at Northern Gas and Power say that increased gas demand will lead to more withdrawals of storage sites.
Gas Infrastructure Europe (GIE), a European gas storage company, reported that European gas storage sites ranked last in the world with 94.43 percent of their capacity.
Analysts at RBC Capital Markets stated in a recent report that the market is still digesting Donald Trump’s win in the U.S. Presidential election. They are also awaiting his views on U.S. and Ukrainian LNG export projects. This could increase longer-term forecasts for supply.
The supply of gas from Russia via Ukraine to Europe remained stable. Russian producer Gazprom said it would send the same 42,4 million cubic metres of gas via Ukraine to Europe on Friday as it did on Thursday.
The benchmark contract on the European carbon markets rose 0.56 euros, to 66.60 euro per ton.
(source: Reuters)
