Dutch and British wholesale gas prices were mixed on Tuesday morning as stable supply helped to offset increased demand due to higher temperatures and lower wind speed, while the market continues to monitor Middle East tensions.
The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was down 0.38 euro at 33.60 euros per megawatt hour (MWh), or $10.66/mmBtu, by 0845 GMT, LSEG data showed.
The Dutch September contract TRNLTTFMc2 was up 0.16 euros at 34.76 euros/MWh.
In the British market, the day-ahead contract TRGBNPD1 was up 0.30 pence at 78.50 pence per therm.
“The warmer weather may be pushing more gas-for-power generation demand which may have a knock-on effect to the short queue of LNG in the coming weeks – showing that the market is still sitting rather nervously despite having relative stable fundamentals for some time,” consultancy Auxilione said in a morning note.
Temperatures across Europe and in Britain are expected to remain high for the coming days, driving gas-for-power demand higher, as well as due to low wind power generation forecasts for the remainder of this week.
However, this should only be a weak bullish driver for gas as most of it is balanced by strong solar power generation, LSEG analyst Ulrich Weber said.
“The local supply side remains stable, characterized by high flows from Norway and low LNG send-out. Norwegian flows should further rise on the day-ahead when the main maintenance at Visund ends,” he added.
The overall forecast for gas for power consumption is up 42 gigawatt hour per day (GWh/d) at 1,879 GWh/d on the day-ahead, LSEG data showed.
The market is closely monitoring tensions in the Middle East as Israel has vowed retaliation against Hezbollah in Lebanon following a rocket strike in the Golan Heights that killed 12 teenagers and children.
Iran-backed Hezbollah denied responsibility for the attack.
France’s Monitor LNG terminal remains fully shutdown until August 12, and an outage continues at one of the two processing trains at Australia’s Ichthys LNG plant in Darwin.
Analysts at Engie’s EnergyScan said that while European LNG send-out fell this weekend and yesterday to their lowest level since Nov. 2021, European gas storage remains high at 84.49%.
In the European carbon market CFI2Zc1, the benchmark contract fell by 0.92 euro to 67.79 euros a metric ton.
Source: Reuters (Reporting By Marwa Rashad; Editing by Nina Chestney)