British and Dutch gas prices rose on Monday morning as colder weather forecasts and lower wind speeds increased demand and market players remained concerned over hydro levels ahead of summer.

The front-month contract at the Dutch TTF hub rose by 1.75 euros to 48.70 euros per megawatt hour (MWh) by 0850 GMT, Refinitiv Eikon data showed.

The British day-ahead price rose by 4.00 pence to 120.00 pence per therm, according to Refinitiv data.

The coming four days will bring a cold Arctic airmass to central European countries, with a significant temperature decline to 3-7 degrees Celsius below normal in Germany and its surroundings, Refinitiv meteorologist Marcin Gorski said in a note, adding that weather is expected to remain relatively cool and dry into the next week.

A European gas trader said that the market is concerned over hydro levels and nuclear situation in France ahead of the summer.

“We see some upward pressure from talks about demand being too high to get storage filled in the summer and the issues with hydro (stocks) and wind,” a European gas trader said.

Hydro stocks in some parts of the Nordics and Europe are starting to improve from drought conditions earlier this year amid more precipitation, but it is too soon to sound the all-clear for the summer, analysts said.

The French energy sector has been caught up in nationwide protests over government plans to raise retirement age leading to output cuts at some nuclear plants.

Analysts at Engie’s EnergyScan said that the market may get some support from the strong rise in oil prices following the OPEC+ surprise output cuts.

However, they ruled out a huge spike in prices and said that the European gas market could remain comfortable without the need for a massive cut in gas demand for power generation.

“But it is a risk that cannot be ruled out if the market is not quickly reassured about the nuclear situation in France,” they said.

Europe’s gas stocks were 55.6% full latest data from Gas infrastructure Europe showed.

British peak wind generation was expected at around 7.1 gigawatts (GW) on Monday and 5.4 GW on Tuesday, out of a total metered capacity of more than 22 GW, Elexon data showed.

In the European carbon market, the benchmark contract CFI2Zc1 edged up by 0.33 euro to 92.26 euros/tonne.
Source: Reuters (Reporting By Marwa Rashad; editing by Nina Chestney)