Dutch and British wholesale gas prices inched higher on Wednesday morning as forecasts for lower wind power output increased demand for gas for power generation and on rising tension in the Middle East.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was up 0.09 euro at 34.62 euros per megawatt hour (MWh), or $10.96/mmbtu, by 0808 GMT, LSEG data showed.

The Dutch September contract TRNLTTFMc2 was up 0.25 euros at 35.35 euros/MWh.

In the British market, the day-ahead contract TRGBNPD1 was up 2.25 pence at 82 pence per therm.

LSEG analysts said lower wind power output for the rest of the week would lead to higher non-local distribution zone demand (which includes power demand) in Northwest Europe, which was forecast up 45 gigawatt hours/day (GWh/d) at 1,937 GWh/day for Thursday.

In Britain, peak wind power generation was forecast at 3.6 gigawatts (GW) on Wednesday, dipping to 3.1 GW on Thursday, Elexon data showed.

Rising tension in the Middle East after the killing of Hamas leader Ismail Haniyeh in Iran also supported prices.

“The strengthening geopolitical tensions… gave further fuel to the upward movement in gas prices at today’s opening, while this time oil is following too,” analysts at Engie EnergyScan said in a daily research note.

Oil futures rebounded more than $1 a barrel from 7-week lows on Wednesday.

In the European carbon marketCFI2Zc1, the benchmark contract rose by 0.23 euro to 68.87 euros a metric ton.
Source: Reuters (Reporting By Susanna Twidale; Editing by Janane Venkatraman)