British and Dutch wholesale gas prices edged lower on Monday morning, amid slow trading, as forecasts for milder weather helped to curb demand.

British gas for immediate delivery was 1.50 pence lower at 97.50 pence per therm by 0807 GMT, while the Dutch contract for May was down 0.75 euro at 40.00 euros per megawatt hour.

Consumption is forecast higher for the day-ahead but increasing temperatures over the coming week should curb heating demand after that, according to Refinitiv Eikon data.

However, a drop in wind output could raise gas-for-power demand. Peak wind generation in UK is forecast at 11.6 gigawatts (GW) on Monday and 7.7 GW on Tuesday, out of total metered capacity of around 22 GW, Elexon data showed.

Norwegian exports to Britain have fallen due to outages and gas has been re-routed to continental Europe but liquefied natural gas (LNG) send-out is strong.

“Summer is approaching, and Europe is in a healthy, safe position as injection season begins, boasting storage levels in the top range of the five-year average,” said senior analyst Nikoline Bromander at Rystad Energy.

“Gas-for-power generation is likely to see an uptick in the coming months, as nuclear generation takes a hit,” she added.

Total power generation from nuclear plants in Europe has dropped to its lowest in more than 30 years due to worker strikes in France and the closure of plants in Germany.

Nuclear power availability will likely be very low in France in the second and third quarters due to strikes and also maintenance outages scheduled.

In the European carbon market, the benchmark contract CFI2Zc1 was down 0.60 euro at 89.12 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)