Europe-Gas: Prices reverse previous losses on colder weather outlook
British and Dutch wholesale gas prices rose on Monday morning, reversing previous losses on Friday, on forecasts of colder weather.
* British gas for immediate delivery rose by 9.50 pence to 1.95 pounds per therm by 0832 GMT
* British gas for November delivery added 10.50 pence to 2.26 pounds per therm.
* The November gas price at the Dutch TTF hub was up 7.70 euros at 91.50 euros per megawatt hour (MWh), whereas the contract for December delivery rose by 8.20 euros to 92 euros/MWh.
* “Prices might see an upward correction after two days of softness. The gas for power forecast is bullish on day-ahead, 9 mcm/d up,” Refinitive analysts said.
* “Although the weather forecast adjusted towards over the weekend, this week should be cooler and LDZ consumption higher, which can add to the bullish concerns,” they added.
* LDZ consumption refers to local distribution zone demand, which is mainly used for heating.
* The UK gas system was around 5 million cubic metres (mcm) over-supplied on Monday, National Grid data showed.
* In the UK, peak wind power generation was forecast at around 6.2 gigawatts (GW) on Monday and slightly lower at 6.1 gigawatts on Tuesday, Elexon data showed. Lower wind output typically raises gas demand from power plants.
* UK wind power generation is well below the seasonal normal level with wind speeds expected to rise on Thursday, Refinitiv analysts said.
* Analysts at Engie EnergyScan said coal prices in Asia are higher, which could signal stronger buying of coal and gas by power producers, which could put upward pressure on the JKM, and therefore European gas.
* European coal API2 coal futures for 2022 rose by $10.50 to $142.50/tonne.
* The benchmark Dec-21 EU carbon contract rose by 1.00 euro to 59.83 euros per tonne.
Source: Reuters (Reporting by Marwa Rashad; editing by Nina Chestney)