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Europe Gas: Prices edge higher on cooler temperatures, lower wind power

Wednesday, 12 June 2024 | 00:00

Dutch and British gas prices edged higher on Tuesday as forecasts for cooler temperatures and lower output from wind farms increased demand for gas for power generation.

The benchmark front-month contract at the Dutch TTF hub inched up 0.09 euro to 34.50 euros per megawatt hour (MWh), or 10.88 USD/mmBtu, by 0823 GMT, according to LSEG data.

In the British market, the day-ahead contract TRGBNBPD1 was up 0.37 pence at 83 pence per therm.
The British within-day TRGBNBPWKD contract was up 0.75 pence at 82.50 p/therm.

“Prices seem to have received support from the strong drop in temperatures below normal,” analysts at Engie EnergyScan said in a daily research note.

LSEG analysts also forecast gas for power demand in Britain up 12 million cubic metres/day (mcm/d) at 41 mcm/d for Wednesday, due to a drop in wind speeds.

Peak wind power generation in Britain was forecast at 9.4 gigawatts dropping to 5.1 GW on Wednesday, Elexon data showed.

Analysts at LSEG also said strong demand for liquefied natural gas (LNG) in Asia amid high temperatures had also supported European gas prices.

“The European hubs need to stay competitive to be able to attract even a few spot cargos to Europe,” LSEG analyst Saku Jussila said in a daily report.

Gas supplies remained stable. Russian gas producer Gazprom GAZP.MM said it would send 42.4 million cubic metres (mcm) of gas to Europe via Ukraine on Tuesday, up from 41.9 mcm on Monday.

In the European carbon market, the benchmark contract CFI2Zc1 rose 0.57 euro to 71.43 euros a metric ton.
Source: Reuters (Reporting By Susanna Twidale; Editing by Kirsten Donovan)

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