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EUROPE GAS-Prices rise on supply concerns, cold weather fcast

European and British wholesale gas prices rose on Thursday morning on supply concerns as temperatures across Europe set to fall below seasonal norms from next week, supporting a bullish outlook until year end.

The Dutch day-ahead contract on the TTF hub was up 7.43 euros at 134.43 euros per megawatt hour (MWh) by 1047 GMT.

The benchmark Dutch front month contract was up 4.4 euros at 134.10 euros/MWh.

The British gas contract for day-ahead delivery was up 18.00 pence at 3.37 pounds per therm and the contract for immediate delivery was up 25.0 pence at 3.35 pounds per therm.

European gas traders said the prices rose on concerns over supply after the French power giant EDF found faults at a nuclear power station and shut down another plant using the same kind of reactors.

The news has driven up power prices, offering more support for gas prices as demand rises ahead of cold weather forecast next week.

“Weather forecast shows a colder weekend and power prices just keep rising and with normal level in sight. The question is at what point will people think its too expensive to use gas at all and when will demand destruction start to impact prices,” a European gas trader said

Russian natural gas deliveries to Germany through the Yamal-Europe pipeline were stable in the early hours of Thursday, data from German network operator Gascade showed.

“Nervousness around weak storage, NS2 concerns, and stronger consumption toward the end of the year amidst continued withdrawals from storage keep markets on their toes despite brisker LNG send out,” Refinitiv analysts said.

“The geo political concerns remain elevated and the recent return to record price level and volatility are supportive factors that should keep prices elevated,” they added.

The European benchmark December 2021 emission allowance (EUA) contract CFI2Zc1 was up by 0.33 euros at 80.83 euros a tonne.
Source: Reuters (Reporting by Marwa Rashad; Editing by Krishna Chandra Eluri)

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