Prices edge up on cooler temperatures, lower wind speeds

British and Dutch gas prices edged higher on Friday morning as forecasts for cooler temperatures and lower wind speeds led to expectations of higher demand in the coming days.

The front-month contract at the Dutch TTF hub (TRNLTTFMc1) rose by 1.67 euros to 45.25 euros per megawatt hour (MWh) by 0824 GMT, Refinitiv Eikon data showed.

The British day-ahead price (TRGBNBPD1) rose by 7.00 pence to 112 pence per therm and the April contract (TRGBNBPMc1) rose by 1.05 pence to 109.05 pence/therm.

In Britain, local distribution zone (LDC) demand, which is primarily used for heating, was forecast at 133 million cubic metres (mcm) for Friday and 146 mcm for Monday, Refinitiv Eikon data showed, up 12 mcm and 14 mcm respectively from previous forecasts.

British peak wind generation was expected at around 8.7 gigawatts (GW) on Friday and 7.8 GW on Saturday out of a total metered capacity of more than 22 GW, Elexon data showed.

In Europe “consumption is forecast up strongly on DA (day-ahead) as temperatures and wind speeds fall, French nuclear send-out issues remain with further delays announced and expected,” Refinitiv analyst Wayne Bryan said in a daily research note.

The French energy sector has been caught up in nationwide protests over government plans to raise retirement age leading to output cuts at some nuclear plants.

Europe’s gas stocks were 55.6% full latest data from Gas infrastructure Europe showed.

Analysts at Moody’s said record-high storage levels will help Europe offset lower gas supplies from Russia this year but said the market still remains exposed to risks.

“We expect that wholesale gas prices will stay fairly volatile because of a structurally tighter balance in gas supply and demand and reduced gas storage flexibility. Any supply shock or material drop in demand is likely to be reflected in rapid price swings,” Moody’s analysts said in a research note.

In the European carbon market, the benchmark contract (CFI2Zc1) edged up by 0.12 euro to 91.08 euros/tonne.