Europe Gas: Prices rise on cold weather forecasts, geopolitical concern
Dutch and British gas prices rose on Monday morning driven by forecasts of colder weather for the remainder of the month and fresh concerns of a widening of the Israel-Hamas conflict.
The Dutch December contract rose by 1.23euros to 46.23euros per megawatt hour (MWh) by 1057 GMT, according to LSEG data.
The Dutch day-ahead contract was up 0.60euro at 45.80euros/MWh.
In Britain, the within-day contract TRGBNBPD1 gained 6.45pence to 112.05 pence per therm, while the day-ahead TRGBNBPD1 contract increased by 13.50 p to 113.50 p/therm.
The British December contract TRGBNBPMc1 jumped 5.93 pence to 119.50 p/therm.
“Today, we do see a rebound which should be attributed to colder forecasts which have ticked in during the weekend,” analysts at Energi Danmark said in a morning report.
Cool weather will arrive in northwestern Europe from Tuesday, pushing prices higher, somewhat offset by ample supply of liquefied natural gas (LNG) and Norwegian piped gas, LSEG analyst Yuriy Onyshkiv said in a daily research note.
“The upside is getting more prominent on the weekend and next week when temperatures are dropping below seasonal averages and lower than earlier predicted,” he added.
British gas demand is set to rise by 31 million cubic metres on Tuesday, Onyshkiv said.
Meanwhile, theseizure of a cargo ship in the southern Red Sea by Yemen’s Houthi rebels at the weekend amid the ongoing Israel-Hamas war has also stoked fresh market concerns over an escalation of the conflict to other parts of the Middle East.
“Although it is not an LNG ship, it makes gas market nervous and (is) potentially providing bullish sentiment,” LSEG analyst Marina Tsygankova said.
European gas storage inventories have started to drop but remain at record highs for the time of year, being 98.94% full, latest data from Gas Infrastructure Europe showed.
In the European carbon market, the benchmark contract CFI2Zc1 rose by 0.36 euro to 76.91euros a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo, Editing by Susanna Twidale)