Dutch and British wholesale gas prices firmed on Wednesday morning, supported by rising power prices amid French nuclear concerns, warmer weather increasing demand for cooling and Europe’s need to refill gas storage sites.
The benchmark Dutch front-month contract at the TTF hub (TRNLTTFMc1) was up by 0.72 euro at 35.50 euros per megawatt hour (MWh) or $11.90/mmBtu, by 0837 GMT, LSEG data showed.
The price for August was 0.75 euro higher at 35.85 euros/MWh.
The British day-ahead contract (TRGBNBPD1) was up 1.80 pence at 83.60 p/therm.
The gas market has opened bullish on warmer forecasts and French nuclear concerns, Karsten Sander Nielsen, senior market analyst at Denmark’s Mind Energy said.
A largely high-pressure-dominated weather pattern bringing near- or above-normal temperatures and below-normal rain will likely last until the end of the month, LSEG meteorologist Georg Muller said.
Hot weather typically drives up demand for air-conditioning in the power sector.
Meanwhile, reports in French media of indications of stress corrosion cracks at nuclear reactors operated by EDF lifted power prices and in turn gas, a trader said.
The French year-ahead power contract (TRFRBYZ6) rose as much as 8.3% to 68.00 euros/MWh on Wednesday morning.
Dutch gas prices are also seeing support from the need to attract liquefied natural gas (LNG) to help refill storages, analysts at Engie EnergyScan said in a morning report.
With European gas storage levels low and a resumption of Russian pipeline flows less likely given fresh sanctions proposed by the European Commission, Europe should continue to pay a premium to maximize its LNG imports, they said.
European storage sites were last seen 51.8% full, trailing filling levels at the same time last year by 20 percentage points, Gas Infrastructure Europe (GIE) data showed.
In the European carbon market, the benchmark contract (CFI2Zc1) rose by 1.86 euro to 74.52 euros a metric ton, also supported by concerns over future French nuclear power output.
Source: Reuters