Dutch and British gas prices edged higher on Wednesday morning as geopolitical risks outweighed bearish fundamentals of strong supply.

The Dutch day-ahead contract TFMBMZ3 was up 0.60 euro at 48.50 euros per megawatt hour (MWh) by 0940 GMT, LSEG data showed.

In Britain the day-ahead TRGBNBPD1 contract rose by 1.5 pence to 120 p/therm.

“Despite the solid fundamentals, the (Dutch day-ahead) price is mainly driven by geopolitical factors, particularly the uncertainty associated with the escalating conflict between Israel and Hamas,” LSEG analyst Tomasz Marcin Kowalski said in a daily market report.

He said the same was also true of the British day-ahead price.

Fears over a possible risk to supply have also been stoked by violence in the Middle East while there are also concerns about a potential escalation of the conflict to other parts of the region.

Currently the market is well supplied Norwegian exports were nominated at 301 million cubic metres (mcm) a day, up 3 mcm from the previous day LSEG data showed.

Russian gas supplies were stable. Russia’s Gazprom GAZP.MM said it would send 42.4 million cubic metres (mcm) of gas to Europe via Ukraine on Wednesday, in line with recent days.

The Dutch November gas contract was up by 0.25 euro at 49.10 euros/MWh, LSEG data showed.

“The market seems to think that the current price level is fair, reflecting the balance between comfortable spot fundamentals on the one hand (EU gas stocks were 98.63% full on average on 23 October) and geopolitical tensions on the other,” analyst at Engie EnergyScan said.

In the European carbon market, the benchmark contract CFI2Zc1 edged down by 0.44 euros to 80.14 euros a tonne.
Source: Reuters (Reporting By Susanna Twidale; editing by David Evans)