British and Dutch wholesale gas prices rose on Tuesday morning after a volatile session on Monday, with a shortlived cold spell lifting heating demand against the backdrop of fresh supply concerns over the war in Ukraine.

The British day-ahead contract rose 10 pence to 170 pence per therm by 0907 GMT, while the within-day contract gained 6.50 pence to 169 pence/therm.

“Barring any supply shocks, we expect the (British day-ahead contract) movement to remain muted with some bias to the upside when looking at the next few days of increased consumption,” Refinitiv analyst Wayne Bryan said in a morning note.

Temperatures in Britain are forecast to dip below normal for the next six days, which should lift heating demand, he added.

However, supply was healthy, with eight liquefied natural gas (LNG) cargoes due to arrive at British terminals by he end of the month, Bryan said.

The British gas system was oversupplied by 8 million cubic metres (mcm) on Tuesday morning, National Grid data showed.

Further out, the British November contract gained 10 pence to 300 pence/therm.

The Dutch November contract was up 4 euros at 161.50 euros per megawatt hour (MWh) by 0905 GMT.

“Next week will be very mild and in the south also sunny with well above normal temperatures,” Refinitiv meteorologist Georg Mueller said.

A mild start to October has helped to curb prices in recent days while plans by several European governments to cap household gas prices could remove an important signal for energy saving, one trader said.

“Everyone is trying to get the feel for where the demand destruction is. That’s the part that will get us through the winter,” the trader said.

Meanwhile, Russian attacks on Ukrainian energy infrastructure on Monday highlighted the persistent threat of gas flows through Ukraine being cut off, he added.

Flows of gas from Russia to Europe via Ukraine remained steady on Tuesday, however.

In the European carbon market, the benchmark contract was up 0.23 euros at 67 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo Editing by David Goodman )