Prices of gas in Europe rise due to forecasted lower temperatures
Dutch and British wholesale prices of gas rose on Monday, recovering from the lows reached late last week. This was due to forecasts for lower temperatures, and Russian forces intensifying their attacks against Ukraine.
LSEG data shows that the benchmark front-month contract for the Dutch TTF Hub rose by 1.81 euro to 40.6 euros per Megawatt Hour (MWh), which is $12.87/mmBtu by 0916 GMT.
It traded at 36.45 Euros/MWh on Friday, its lowest price since September 27, 2024.
The British day-ahead contract increased by 5.00 pence to 100.50 p/therm.
Saku Jussila, LSEG analyst, says that the latest forecasts for temperatures show a decrease in temperatures between March 12-18. This could increase demand.
Pro-Russian bloggers reported that Russia invaded Sudzha, a town in western Russia's Kursk region on Sunday. Special forces had used a pipeline to surprise Ukrainian troops as part of an offensive to expel Ukrainian soldiers.
Sudzha hosts major gas measurement and transfer stations along a pipeline which used to transport Russian natural gas to the Ukrainian gas transmission network for further transportation to Europe.
On Monday, the forces made further advances in the Kursk area.
Jussila stated that "the news from Ukraine combined with the colder temperatures forecast should support today's market."
Analysts at Auxlione, a consultancy, said that if Russia attacks the energy infrastructure of Ukraine overnight, it could lead to Ukraine needing more help from the European market, which is already stressed due to the low levels of gas storage as winter ends.
Gas Infrastructure Europe data showed that EU gas storage facilities were 36.80% filled at the time. The EU maintained a filling target of 90% until Nov. 1, according to Gas Infrastructure Europe.
The benchmark contract on the European carbon markets was up by 1.38 euros at 68.70 euro per metric ton. (Reporting and editing by Nina Chestney; Marwa Rashad)
(source: Reuters)
