British prompt gas prices rose on Tuesday morning amid increased supply concerns as Norwegian flows dropped and markets embraced for further delays in the restart of Freeport LNG, one of the biggest U.S. export facilities for liquefied natural gas.
The Dutch the benchmark front-month contract traded up 2.20 euros at 116.80 euros/MWh by 0958 GMT, according to Refinitiv Eikon data.
The British within-day contract rose by 8 pence to 118 pence per therm, and the day-ahead contract was up by 0.50 pence at 112 p/therm, according to Refinitiv Eikon data.
U.S. company Freeport LNG has not yet submitted a full request to the authorities to restart a Texas plant, a source said on Monday, raising questions about its ability to meet restart timeline.
The company was targeting a mid-December restart for the exports plant which has been shut for six months after a fire.
Refinitiv analysts said the gas prices were supported by “news of colder weather spiking U.S. gas prices to a two-week high and that Freeport LNG has not yet submitted a full request to restart a Texas plant could increase risk to EU LNG supplies.”
UK temperature was below seasonal normal on Tuesday, according to Refinitiv analysts, increasing demand for heating.
Norwegian gas nominations to Britain also dropped from 74 millions of cubic metres (mcm) per day on Monday to 66 mcm per day on Tuesday, supporting the prices.
Britain’s gas system was around 26 mcm under-supplied on Tuesday, with supply forecast at around 278 mcm and demand at around 304 mcm, National Grid data showed.
Peak wind generation in the UK is forecast at around 10 gigawatts (GW) on Tuesday, but was expected to increase to around 14 GW on Wednesday, Elexon data showed. Strong wind power output curbs demand from gas-fired power plants.
The market was also keeping an eye on the European Commission’s proposal for a gas price cap which will be debated by energy ministers from the bloc’s 27 member countries on Thursday.
“The market is clearly in a wait-and-see position ahead of announcements on EU energy measures on 24 November,” Engie EnergyScan analysts said.
Europe’s gas stocks were 95% full, according to latest data from Gas Infrastructure Europe, down from a peak of 95.61% on Nov. 13.
In the European carbon market, the benchmark contract CFI2Zc1 was down 1.07 euros at 73.54 euros a tonne.
Source: Reuters (Reporting by Bozorgmehr Sharafedin; Editing by Maju Samuel)