Dutch and British wholesale gas prices edged up on Friday morning on weaker wind output and as Slovak state-owned gas buyer SPP dismissed a report that a deal to replace Russian gas with supply from Azerbaijan was close.
The benchmark front-month contract, which has now rolled to December, at the Dutch TTF hub was 1.02 euro higher at 39.67 euros per megawatt hour (MWh) by 1002 GMT, LSEG data showed.
The Q1 2025 contract was 0.81 euro higher at 39.81 euros/MWh.
The British contract for the weekend was 0.75 pence higher at 98.50 pence per therm, while other contracts were down.
Slovak state-owned gas buyer dismissed a Bloomberg report on Thursday that European companies were nearing a gas deal with Azerbaijan using the same pipeline network that now exports Russian gas through Ukraine to the European Union.
Gas prices were down after the report.
“We regularly discuss the topic with our partners, but the information about the upcoming conclusion of a gas supply contract with the participation of SPP is not true,” it said in a statement.
On the demand side, wind speeds in north-west Europe are forecast to fall over the next few days, which could raise demand for gas from power plants.
“NWE total demand is forecast to rise by 1852 gigawatt hours per day (GWh/d) on the day-ahead due to lower temperatures and weaker windspeeds on Monday. Some upward price correction is also possible after yesterday’s reports regarding the Ukraine transit deal unless it is officially confirmed,” said LSEG analyst Yuriy Onyshkiv.
Peak wind generation in Britain is forecast to fall to 4.3 gigawatts (GW) tomorrow from 9.3 GW today, Elexon data showed.
Looking ahead, consultancy Energy Aspects said it thinks TTF prices need to be higher over the winter 2024-2025 balance than they are currently trading to avoid depleting storage too quickly.
“The higher price would limit gas use in the power sector and attract sufficient LNG from Asian markets. We already see Europe’s gas storage being depleted to around 48.0 billion cubic metres (bcm) by end-March 2025, down by 15.6 bcm y/y,” the analysts said.
North American LNG export project delays further complicate the prospect of refilling storage quickly next year and production weakness in both Turkey and Egypt is increasing their need for imports, suggesting less LNG availability for Europe.
Energy Aspects added that it expects Asia to take 3.9 million tonnes more LNG this winter year-on-year, driven by growth in India, as well as China, Taiwan and Bangladesh. This should sustain an open arbitrage for U.S. spot cargoes to head to Asia.
In the European carbon market CFI2Zc1, the benchmark contract inched up by 0.05 euro to 64.63 euros per metric ton.
Source: Reuters (Reporting by Nina Chestney)