British and Dutch wholesale gas prices gained ground on Thursday morning due to a drop in Norwegian gas flows and higher demand from the power sector.

The British within-day contract rose by 6.00 pence to 150.00 p/therm by 0937 GMT, while the day-ahead contract was up 4.00 pence at 152.00 p/therm, according to Refinitiv Eikon data.

Norwegian gas nominations, or bookings, to send gas to continental Europe and Britain were down by a combined 21 million cubic metres (mcm) on Thursday due to maintenance outages.

The UK gas system was 21.3 mcm per day short on Thursday, according to National Grid data.

Weaker wind output was also lifting British gas-for-power demand by 14 mcm/day, Refinitiv Eikon data showed.

Peak wind generation in Britain is forecast at 11.5 gigawatts (GW) on Thursday and 6.5 GW on Friday, out of total metered capacity of around 22 GW, Elexon data showed.

The weather will be quite cold and calm until the weekend and slowly milder and more unsettled from next week onwards, Refinitiv meteorologist Georg Mueller said in a daily note.

The British February contract TRGBNBPMG3 was up by 2.42 pence at 147.01 p/therm, and the benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 rose by 3.60 euro to 59.40 euros per megawatt hour (MWh), according to Refinitiv Eikon data.

The downtrend in recent weeks has brought prices close to fuel switch levels, which could bring more gas into power generation again, a trader said.

“It makes gas linked to coal and CO2 a bit more jittery,” he added.

The market is also still waiting to see how much industrial demand returns after the recent price drop, another trader said.

In the European carbon market, the benchmark contract CFI2Zc1 gained 2.53 euros to 86.79 euros a tonne.

Analysts have upped their price forecasts for EU carbon permits for the next three years on expectations that Europe’s economies could start to improve as energy prices fall from record highs.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Nina Chestney)