Dutch wholesale gas prices edged higher on Tuesday morning as forecasts for cooler temperatures and weaker renewable power output lifted demand.

The benchmark front-month contract at the Dutch TTF hub (TRNLTTFMc1) was up 0.45 euro at 46.75 euros per megawatt hour (MWh), or $14.35 /mmBtu, by 0906 GMT, according to LSEG data.

The Dutch April contract (TRNLTTFMc2) was up 1.06 euro at 46.81 euros/MWh.

For Northwest Europe “temperatures are expected to dip below normal from 27 Feb to Mar 4,” LSEG analyst Wayne Bryan said in a daily research note.

LSEG said local distribution zone demand, which is primarily used for heating, was forecast up 321 gigawatt hours a day (GWh/d) for the day-ahead and 45 GWh/d for the weekend in Northwest Europe.

Expectations of weaker output from renewable wind and solar plants also increased demand for gas from gas-fired power plants, Bryan said.

In Britain the day-ahead contract (TRGBNBPD1) slipped 1.1 pence at 112.5 pence per therm.

In Britain temperatures were expected to turn warmer towards the weekend.

Ongoing concerns over Europe’s gas storage levels have provided support to gas prices over the past few weeks.
Analysts at Engie EnergyScan said EU gas stores were around 40.6% full on average compared with 64.1% this time last year.

“As the storage gap is unlikely to improve in the very short term, the market seems reluctant to sell aggressively,” the analysts said in a daily research note.

In the European carbon market (CFI2Zc1), the benchmark contract was down 0.36 euro at 73.29 euros a metric ton.
Source: Reuters