Dutch and British gas prices rose on Thursday morning amid ongoing geopolitical risks and colder weather forecasts, while higher wind speeds and increased Norwegian gas flows provided some balance.

The Dutch November gas contract was up by 2.08 euros at 48.48 euros per megawatt hour (MWh) by 0842, according to LSEG data.

The British November contract was up 2.29 pence at 120.73 pence per therm.

Geopolitical tensions have dominated gas price moves in recent days, analyst Ole Hvalbye at SEB said in a note.

Amid the ongoing attacks by the Hamas movement that rules the Gaza Strip, Israel has cut gas exports to Egypt by 20% or 18.4 million cubic metres a day, which likely impacts Egypt’s exports of liquefied natural gas (LNG), he said.

The rupture of the Baltic connector gas pipeline this week due to possible sabotage also cast doubt over the security of Europe’s key energy infrastructures, Hvalbye said.

“This sense of vulnerability has undeniably contributed to the recent uptick in natural gas prices,” he added.

Nordic and Baltic countries have tightened security at energy installations in the wake of the event, while the Finnish Security Intelligence Service said it cannot rule out the involvement of a “state actor” in the incident.

Additionally, there is still uncertainty over a potential strike at Chevron’s CVX.N Australian LNG facilities, which adds uncertainty over winter supplies, with company and union representatives set to meet again on Friday.

Further in, the British day-ahead contract traded flat at 112 p/therm, while the Dutch equivalent TRNLTTFD1 gained 1.30 euro to 45.80 euros/MWh, LSEG data showed.

Gas demand for heating is set to rise in the coming days with temperatures in Britain to drop sharply by early next week, LSEG analyst Ulrich Weber said.

“However, latest temperature forecasts are slightly less bullish and for the next couple of days we expect lower gas for power demand as wind power generation should rise significantly after today,” he added.

Peak wind power output is set to more than double from 7.6 gigawatts (GW) on Thursday to 15 GW on Friday, Elexon data showed.

Norwegian gas pipeline nominations to Britain, Germany and the Netherlands also rose on Thursday. NG/NO

In the European carbon market, the benchmark contract CFI2Zc1 rose by 0.17 euros to 84.29 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Nina Chestney)