Dutch and British wholesale gas prices continued to rebound on Thursday from a two-month low hit earlier this week on a downward revision of temperatures, while healthy inventories and liquefied natural gas (LNG) flows limited the upside.

The Dutch January contract TRNLTTFMc1 rose by 1.25 euros to 40.50 euros per megawatt hour (MWh) by 1008 GMT, LSEG data showed, rising for a second day in a row since Tuesday, when the contract briefly hit 37.08 euros/MWh, its lowest level since Oct. 6.

The Dutch day-ahead gas contract TRNLTTFD1 was up by 0.85 euro at 39.85 euros/MWh.

The British equivalent TRGBNBPD1 was up by 1.97 pence at 96.25 pence per therm, while the British contract for January TRGBNBPMc1 rose by 2.75 p to 100.95 p/therm.

LSEG analyst Timothy Crump said that a decrease in temperature forecasts from Wednesday was behind the rise.

European gas storage inventories were last seen at 92.7% full, coming off record highs and slowly converging with levels seen in 2019, according to latest data from Gas Infrastructure Europe.

Abundant liquefied natural gas (LNG) supply is also limiting any upside.

Analysts at ANZ Research said in a research note that European gas prices are generally expected to remain subdued amid high storage levels and weaker demand.

“Stocks look sufficient to meet heating demand. Weak industrial activity and higher renewable power generation are paving the way for gas demand rationing,” ANZ analysts said.

In Britain, peak wind power generation was forecast at 18.9 gigawatts (GW) on Thursday, falling to 16.3 GW on Friday, out of the total metered capacity of about 23 GW, Elexon data showed.

In the European carbon market, the benchmark contract CFI2Zc1 inched up by 0.12 euro to 68.90 euros a metric ton.
Source: Reuters (Reporting by Marwa Rashad; Editing by Nina Chestney)