European wholesale gas prices were mixed on Tuesday as expectations of high wind power output weighed on British spot prices while the benchmark Dutch contract was little changed.
The British day-ahead contract TRGBNBPD1 was down by 3.75 pence to 146 p/therm by 1002 GMT, according to Refinitiv Eikon data.
UK peak wind generation is forecast at 6.2 gigawatts (GW) on Tuesday, rising to 15 GW on Wednesday, Elexon data showed.
British gas-for-power demand is forecast at 45 million cubic metres (mcm) for Wednesday, down 23 mcm on the previous forecast, Refinitiv Eikon data showed.
Higher wind output typically reduces demand for gas from power plants.
The Dutch front-month contract TFMBMH3 was almost flat at 58.06 euros per megawatt hour (MWh), ICE data showed.
“It seems prices have found an equilibrium around their current levels,” analysts at Engie EnergyScan said in a research note.
“In addition to the ‘price cap’ set by the maximum coal switching level for power generation, the price of gasoil used for heating purposes in industry (currently estimated at 59.59 euros/MWh) tends also to exert downward pressure,” they added.
Analysts at Morgan Stanley have lowered their price forecasts for Dutch gas on expectations that gas storage sites will be fuller than previously expected by the end of the winter period.
Morgan Stanley expects the Dutch front-month contract will reach 47 euros/MWh by the middle of the year, down from a previous forecast of 64 euros/MWh.
“We forecast inventories to be 59% full by end winter, up from a previous estimate of 51%,” the analysts said.
European gas storage sites are currently 70.15% full, the latest data from Gas Infrastructure Europe showed.
In the European carbon market, the benchmark contract CFI2Zc1 edged down by 0.07 euros at 90.81 euros a tonne.
European Union lawmakers will vote next week on plans to auction carbon permits early to raise cash for countries to quit Russian gas, soothing concerns of a postponed vote that some analysts said helped to drive up carbon prices last week.
Source: Reuters (Reporting By Susanna Twidale; editing by Nina Chestney)