Dutch and British gas prices edged higher on Tuesday morning, likely driven by profit-taking after prices fell on Monday, but gas storages remain full and heating demand is muted, with the market likely to trade sideways in the coming days, analysts said.

The Dutch front-month contract was up 1.25 euro at 46.35 euros per megawatt hour (MWh) by 0927 GMT after dropping some 5% on Monday, according to LSEG data.

The January contract rose by 1.25 euro 47.90 euros/MWh.

However, the overall market picture remained bearish in the short-term as gas storage in Europe continued to edge higher, analysts at ING Research said in a note.

“All eyes will be on when the heating season gets underway and storage starts to draw, particularly given that storage is essentially full,” they added.

Europe’s gas storage sites were last seen 99.63% full, a record level for the time of year, according to the latest Gas Infrastructure Europe data.

Weather forecasts are showing above normal temperatures with only brief cold periods, while price spikes related to the Middle East conflict were often short lived, analyst at Energi Danmark said in their morning note.

“We could therefore expect further downside although with some profit taking from short positions during the way,” they added.

The British day-ahead contract TRGBNBPD1 rose by 4.00 pence to 105.00 pence/therm, according to LSEG data.

However, LSEG analyst Wayne Bryan expected prices to stabilise around current levels.

“Barring any significant changes to fundamentals over the coming days we expect this stability until the next likely news driven spike,” he said in a morning report.

Peak wind power generation in Britain was forecast at 11.9 gigawatts (GW) on Tuesday, rising to 17.8 GW on Wednesday, Elexon data showed.

In the European carbon market, the benchmark contract CFI2Zc1 fell by 1.57 euro to 76.07 euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; Editing by Susanna Twidale)