British and Dutch wholesale gas prices edged up on Tuesday morning on expectations of lower wind output which would increase demand for gas from power stations.

The British day-ahead gas price was 3.25 pence higher at 86 pence per therm by 0815 GMT, while the weekend contract was 4.00 pence higher at 84.00 p/therm, Refinitiv Eikon data showed.

The Dutch front-month contract was 0.83 euro higher at 36.55 euros per megawatt hour (MWh).

“We see stronger demand in gas for power during the next couple of days… This is due to weaker wind power supply than previously anticipated,” Refinitiv analyst Ulrich Weber said in a daily research note.

British gas for power demand is forecast at 48 million cubic metres (mcm) on Tuesday and 53 mcm on Wednesday, Refinitiv Eikon data showed.

The forecasts were 21 mcm and 4 mcm higher respectively than initial expectations.

Peak wind power generation in Britain is forecast at 5.8 gigawatts (GW) for Tuesday falling to 4.3 GW on Wednesday compared with total metered capacity of 22 GW.

Analysts however said expectation of warmer temperatures could dampen prices this week.

“Temperatures are expected to stay elevated for the weeks ahead according to the latest long term forecasts,” consultancy Auxilione said in a morning report.

European gas stocks remained high, with Europe’s gas stores 61.8% full according to latest data from Gas Infrastructure Europe.

In the European carbon market, the benchmark contract rose by 0.76 euros to 88.17 euros a tonne.
Source: Reuters (Reporting By Susanna Twidale; Editing by Kirsten Donovan)