Dutch and British wholesale gas prices edged up on Friday morning on expected lower wind output in Britain next week and concerns around some Norwegian outages being extended.

The benchmark front-month Dutch contract inched up by 0.82 euro to 27.45 euros per megawatt hour (MWh) by 0827 GMT, while the British weekend price was 0.50 pence higher at 63.50 pence per therm, according to Refinitiv Eikon data.

The British contract for winter 2023 was 3.00 pence higher at 118.00 pence/therm.

Gas-for-power demand in the UK is expected to pick up as wind speeds calm down after the weekend, with consumption rising by 14 million cubic metres (mcm) to 48 mcm/day.

An outage at Norway’s Troll field has ended and flows are expected to increase through the Langeled pipeline to Britain but some risks remain related to an outage at the Kollsnes gas processing plant which has been extended a few times now, said Refinitiv gas analyst Ulrich Weber.

But gas storage levels in Europe are around 80% full.

“We maintain a slightly bearish view on TTF prices for the balance of this summer given that Europe is still filling its storage capacity quickly and could run short on space for injections in September,” said analysts at Energy Aspects.

“Key risks for that period are how much and if Equinor will defer gas production and the amount of global LNG maintenance that will be scheduled around that time,” they added.

Analysts at Morgan Stanley said storage levels could start to deplete from October, depending on temperatures and renewables output.

If the number of heating degree days is above normal each month and the performance of renewables and hydropower is below normal, inventories will be drawn down quickly and Europe will have to attract even more liquefied natural gas (LNG), which ould require much higher Dutch gas prices close to 100 euros/MWh, they said.

In the European carbon market, the benchmark contract CFI2Zc1 edged up by 0.52 euro to 86.36 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)