EUROPE GAS - European prices rise from 18-month lows as cold weather looms

The Dutch and British gas price rose on Friday morning from a low of 18 months, which was reached a day before. This is because temperatures are expected to drop sharply in the coming week, increasing demand for energy, which should lead to a rise in gas storage withdrawals.

LSEG data shows that the benchmark Dutch front-month contract was up 0.17 euros at 30.65 Euro per megawatt hour at TTF hub, or $10.46/mmBtu at 0919 GMT.

The Dutch day-ahead contracts was up by 0.81 euros at 30.70 Euro/MWh.

Both contracts reached their lowest levels since May 2024 on Thursday as a plentiful supply of liquefied gas and mild weather recently offset low storage levels.

The British gas day-ahead price rose 11.00 pence, to 79.50 p/therm. Meanwhile, the weekend contract increased 0.50 pence.

Ulrich Weber, LSEG analyst, said: "We will see the demand increase taking the first major step on Monday."

The temperature is expected to fall by more than 5 degrees Celsius on average by Monday. Northwest European local distribution zones (LDZ), which largely reflect heating demand, will see their consumption rise by 1,105 gigawatt-hours (GWh) each day.

Weber stated that the forecast for this morning also predicts a colder and longer period of weather next week. The increase in demand is expected to lead to a larger withdrawal of gas.

Gas Infrastructure Europe's data shows that EU gas storage facilities were 82.23% full last month, compared to 92.58% last year at the same point.

Energy Aspects analysts said that the European market was well-balanced for the winter of this year and the risks seemed to be primarily on the upside. They added that weather variations are still the main uncertainty for TTF price.

The benchmark carbon contract in Europe was down by 0.16 euros at 81.18 euro per metric ton. Nora Buli, reporting from Oslo; Harikrishnan Nair, editing)

(source: Reuters)