Dutch and British wholesale gas prices were mixed on Monday morning, as lower renewables output offset milder forecasts for the next two weeks, while the market continued to price in a risk premium for tensions in the Middle East.
The Dutch November gas contract TRNLTTFMc1 fell by 1.95 euros to 48.39 euros per megawatt hour (MWh) by 0918 GMT, according to LSEG data. The December contract TRNLTTFMc2 was down by 1.50 euros at 53 euros/MWh.
The market is focused on weather runs, storage level and demand, a trader said.
LSEG analyst Tomasz Marcin Kowalski said that the next two weeks are expected to be warm in continental Europe, with temperatures fluctuating around 1.5 degrees above the seasonal average and limiting demand for heating.
Imports of liquefied natural gas (LNG) and pipeline gas from Norway are “robust”, while full European gas storage left very little room further additions, Kowalski added.
European gas storages were last seen 98.4% full, a historic high for the time of year, Gas Infrastructure Europe data showed.
The market still carries a risk premium that an escalation of the conflict between Israel and Hamas could spread to other parts of the Middle East and hamper LNG deliveries, analysts said.
Israel has already shut down a gas field and pipeline which supplied gas to Egypt, impacting LNG shipments from there, while the nearby Suez Canal is a key transport route for LNG from major producer Qatar to Europe.
The Dutch day-ahead contract TRNLTTFD1 was up 0.80 euros at 46.80 euros/MWh, with the British equivalent TRGBNBPD1 up 9.50 pence at 112.50 pence per therm.
British gas for power demand is expected to rise by 5 million cubic metres (mcm) per day on Tuesday, but would reduce “significantly” later this week on rising wind output, LSEG’s Kowalski said.
Peak wind power generation in Britain is forecast to dip from 11.8 gigawatts (GW) on Monday to 11.1 GW on Tuesday, out of total metered capacity of 23.1 GW, Elexon data showed.
In the European carbon market, the benchmark contract CFI2Zc1 fell by 1.10 euro to 80.31 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Maju Samuel)