Dutch and British wholesale gas prices edged up on Friday morning as forecasts for cooler temperatures and expectations of weaker renewable power output boosted demand.

The benchmark front-month contract at the Dutch TTF hub was up 0.22 euro at 34.00 euros per megawatt hour (MWh) at 1101 GMT, LSEG data showed.

The Dutch day-ahead contract was up by 1.04 euros at 33.99 euros/MWh.

In Britain, the equivalent day-ahead contract TRGBNBPD1 was up 2 pence at 87 pence per therm.

“Falling temperatures and lower renewable generation … continued to lend support,” analysts at Engie EnergyScan said in a daily market note on Friday.

The analysts said temperatures in Northwest Europe are expected to fall by up to 6 degrees Celsius below normal levels next week.

Analysts at LSEG forecast British local distribution zone (LDZ) gas demand, which is primarily used for heating, at 257 million cubic metres (mcm) per day on Monday, a rise of 63 mcm.

In Northwest Europe, LDZ demand is forecast to increase by 2,093 gigawatt hours/day (GWh/d) to 5,654GWh/d on Monday.

“Most of the upside has already been priced in. However, the market is likely to keep closely following the weather forecast as the only fluctuating variable able to affect the balance”, LSEG analyst Yuriy Onyshkiv said in a daily research note.

High gas storage levels are also limiting price gains. Europe’s gas stores are almost 86% full, latest data from Gas Infrastructure Europe showed.

In the European carbon market, the benchmark contract CFI2Zc1 edged up by 0.48 euro to 76.30 euros per metric ton.
Source: Reuters (Reporting by Susanna Twidale, Editing by Mark Potter)