British wholesale gas prices dropped on Tuesday morning as Norwegian exports increased and wind power output remained strong while Dutch prices rose amid higher demand.

In Britain, the gas contract for immediate delivery fell by 43 pence to 107 pence/therm by 0931 GMT, while the contract for next-day delivery was down 130 pence at 110 pence/therm.

Nomination for gas exports from Norway to Britain increased on Tuesday, putting pressure on UK prices.

“The minimal Norwegian maintenance schedule allows even more exports to the UK, which is currently sufficiently supplied – another bearish signal to spot prices,” Refinitiv analysts said.

Analysts at Engie EnergyScan said the fall of gas prices in the Asian market, as the result of drop in China’s consumption, has also exerted strong downward pressure on European markets.

Forecasts for milder weather at the start of December was another bearish driver for the market, analysts said.

Strong levels of wind generation also pressured prices, as high wind output typically reduces demand for gas from power plants.

Peak wind power output was forecast at around 18 gigawatts (GW) for Tuesday and 15.5 GW on Wednesday, out of total metered capacity of around 20 GW, Elexon data showed.

The Dutch day-ahead contract rose by 22.50 euros to 75.50 euros per megawatt hour (MWh), while the benchmark front-month Dutch contract was up 5.45 euros at 117.25 euros/MWh.

“Prices are rebounding this morning. However, the 5-day average should oppose resistance as fundamentals in Europe and in Asia do not justify a greater rebound,” Engie EnergyScan analysts said.

Eastbound gas flows via the Yamal-Europe pipeline to Poland from Germany fell on Tuesday morning while flows of gas from Russia to Europe via Ukraine remained steady.

In the European carbon market, the benchmark contract was down 0.79 euros at 76.70 euros a tonne.
Source: Reuters (Reporting by Bozorgmehr Sharafedin; editing by Nina Chestney)