Dutch and British gas prices rose on Wednesday morning supported by cooler temperature forecasts and rebounding after a drop on Tuesday.

The Dutch December contract TRNLTTFMc1 rose 1.24 euro to 44.92 euros per megawatt hour (MWh) by 1018 GMT, LSEG data showed.

The British December contract TRGBNBPMc1 was up by 1.46 pence at 111.75 p/therm.

“We sold a lot yesterday so a bit of retrace is typical,” a trader said.

In addition, the latest EC morning weather forecast was colder this morning, he added.

Temperatures in northwest Europe will briefly rise above normal on Thursday before dropping to below the seasonal average until the first week of December at least, LSEG data showed.

European gas storage inventories have started to drop but remain at record highs for the time of year, at just below 99% full, according to latest data from Gas Infrastructure Europe.

However, the market continues to keep a risk premium for cold weather depleting reserves, the trader said.

The TTF December contract was likely to continue to trade in the lower part of a 42.54-47.54 euros/MWh range, analysts at Engie EnergyScan said in a morning note.

“The market seems to believe this is (currently) a fair equilibrium for European gas prices: a right balance between comfortable spot fundamentals and the various risks (both on supply and demand),” they added.

Further in, the Dutch day-ahead contract TRNLTTFD1 was up by 1.60 euros at 45.30 euros/MWh, with the British day-ahead contract TRGBNBPD1 rising 0.50 pence to 110.50 p/therm.

Prices are up despite forecasts of lower demand amid strong wind output and milder temperatures on Thursday.

Peak wind power generation in Britain was forecast at 17.4 gigawatts (GW) on Wednesday, rising to 18.5 GW on Thursday, out of total metered capacity of about 23 GW, Elexon data showed.

In the European carbon market, the benchmark contract CFI2Zc1 rose by 0.44 euro to 75.81 euros a metric ton.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Susanna Twidale)