Dutch front-month wholesale gas remained at a 10-month intraday high on Friday morning amid colder weather forecasts, geopolitical risks and storage withdrawals.

The benchmark front-month contract at the Dutch TTF gas hub rose by 0.65 euro to 42.83 euros per megawatt hour (MWh) by 0916 GMT, still the highest since Dec. 1, according to LSEG data.

The December price was 0.60 euro higher at 43.05 euros/MWh.

In the British market, the day-ahead contract TRGBNBPD1 was 1.13 pence higher at 106.13 pence per therm, also the highest since Dec. 1, while the weekend contract was 2.00 pence higher at 106.50 pence/therm.

Weather forecasts show colder temperatures for the start of November and there is an expected rise in local distribution zone demand of 1,000 gigawatt hours per day (GWh/d) in north-west Europe, LSEG data showed.

Total exports from Norway were flat but extensions to outages in Norway remained a risk. Wind output in Britain is also expected to weaken which could raise demand for gas from power plants.

“TTF prices are increasing again this morning…they still have technical upside potential.The spot situation and the rise in the geopolitical risks push the Bulls to think they can get the maximum of this potential,” said analysts at Engie EnergyScan.

Overall, the European gas balance has tightened in recent days and, on October 22 and 23, EU gas stocks have switched to net withdrawal mode: on 23 October, they were 95.26% full on average, compared to 98.47% last year, they added.

“In addition to the rise in the geopolitical risks (in the Middle East and between Russia and Ukraine), this tightening of the spot situation has fueled an additional rise in curve prices,” the analysts said.

In the European carbon market CFI2Zc1, the benchmark contract was up 0.21 euro at 66.84 euros per metric ton.
Source: Reuters (Reporting by Nina Chestney)