EUROPE GAS-Prices rise on strong demand from power plants as wind power dips

British and Dutch wholesale gas prices rose on Monday morning as forecasts for lower wind speeds raised expectations of stronger demand for gas from gas-fired power plants.

In the British gas market, the within-day contract rose by 7.00 pence to 130.00 pence per therm, while the day-ahead contract rose by 4.97 p to 140.00 p/therm.

The Dutch day-ahead contract rose by 4.90 euros to 96.45 euros per megawatt hour (MWh). The Dutch May contract edged up 0.40 euro to 97.35 euros/MWh.

Peak British wind power generation was forecast at 5.5 gigawatts (GW) on Monday, falling to 4.2 GW on Tuesday, Elexon data showed, compared with total metered capacity of almost 20 GW.

Analysts at Refinitiv forecast gas-for-power demand in Britain at 56 million cubic metres (mcm) a day on Tuesday, up 11 mcm on previous forecasts.

Wind power was also expected to fall in Europe.

“We expect a slightly tighter gas system on the Continent in the coming days due to considerably higher gas for power demand this week,” analysts at Refinitiv said in a daily research note.

Traders said there are still concerns over Russia’s decree in March that foreign buyers pay for gas in roubles or else have their supplies cut, a move most European capitals rejected.

The European Commission on Friday said it could be possible for payments to still be made without sanctions being breached but that more clarity was needed from the Kremlin.

Daily nominations for Russian gas deliveries to Slovakia via Ukraine rose on Monday, while flows eastbound into Poland from Germany through the Russia-EU Yamal pipeline and direct flows from Russia to Germany via Nord Stream 1 remained stable.

In the European carbon market, the benchmark contract fell by 2.14 euros to 86.85 euros a tonne.
Source: Reuters (Reporting by Susanna Twidale; editing by Nina Chestney)