Dutch and British wholesale gas prices rose on Wednesday morning as colder weather and less wind generation were expected.

The benchmark front-month contract at the Dutch TTF hub was up 1.37 euros at 31.53 euros per megawatt hour (MWh) by 1017 GMT, while the March contract was up 1.17 euros at 31.45 euros/MWh, according to LSEG data.

In the British gas market, the day-ahead contract rose by 5.50 pence to 77.00 pence per therm while the February contract was 2.73 pence higher at 79.00 pence/therm.

“Forecasts for lower temperatures and lower renewable generation and technical buying are lending some support this morning,” said analysts at Engie EnergyScan.

“But, given comfortable stock levels and strong supply, the price upside potential appears limited and the (TTF) 5-day average (32.53 euros/MWh) could continue to oppose resistance,” they added.

Temperatures in the UK and the Continent are set to fall from today – from above normal to several degrees below normal levels, LSEG data showed, which should increase gas demand for heating.

Wind power generation is also set to drop as temperatures decline which could increase gas demand from power plants.

On the supply side, Norwegian pipeline gas and liquefied natural gas flows are stable.

“In the absence of any supply shocks or demand surge, it is looking likely that European storage will finish the 2023/24 heating season around 50% full, which suggests limited upside for prices,” said analysts at ING.

In the European carbon market, the benchmark contract CFI2Zc1 was up 0.90 euro at 76.86 euros per metric ton.
Source: Reuters (Reporting by Nina Chestney)