Dutch and British wholesale gas prices rose on Monday morning, driven by concerns over supply as well as rising demand from the power sector, with expected hot weather likely to result increased use of air conditioning.
The benchmark front-month Dutch contract TRNLTTFMc1 was up 1.95 euros at 37.45 euros per megawatt hour (MWh) by 0847 GMT, Refinitiv Eikon data showed.
The British equivalent TRGBNBPMN3 was up 1.25 pence at 87.50 pence per therm.
Market participants were reacting to a slowdown in liquid natural gas (LNG) supplies over the past week, with some also still adjusting to the mid-June rally to almost 50 euros/MWh after lower prices for most of the year, one trader said.
LNG send-out across Europe has fallen in the opening days of July to lows not seen in 18 months, said Tom Marzec-Manser, head of gas analytics at data intelligence company ICIS.
“This is likely raising some questions as to whether the whole of July will suffer from lower than normal LNG deliveries that could ultimately tighten the European supply-demand balance.
And while a bout of Norwegian maintenance outages is set to end in the next two weeks, traders may now be focusing on a second run starting in August and lasting into October, Energi Danmark said in a morning note.
Forecasts of hot weather across Europe from the end of this week was also supporting prices, they added.
Temperatures are forecast to rise to 5-8 degrees Celsius above normal in the second half of this week, said Refinitiv meteorologist Marcin Gorski.
The Dutch day-ahead contract TRNLTTFD1 was down 1.72 euros at 35.38 euros/MWh while the British equivalent TRGBNBPD1 rose by 0.5 pence to 93 p/therm and the within-day TRGBNBPWKD contract gained 4 pence to 95 p/therm.
Total Norwegian export nominations are up by 18 million cubic metres (mcm) per day at 250 mcm/day while British gas-for-power demand is set to rise by 17 mcm/day because of a drop in wind speeds, said Refinitiv analyst Timothy Crump.
In the European carbon market, the benchmark contract CFI2Zc1 was down 0.22 euros at 88.86 euros a tonne.
Source: Reuters (Reporting by Nora Buli Editing by David Goodman )