Prices of EUROPE GAS firm due to higher demand, French nuclear concerns and hot weather
The Dutch and British wholesale gas price rose on Wednesday morning. This was due to the rising electricity prices in France, increased cooling demand and Europe's need for gas storage sites.
LSEG data shows that the benchmark Dutch front-month contract was up 0.72 euros at 35.50 Euro per megawatt hour or $11.90/mmBtu at 0837 GMT.
The price of August was 0.75 euros higher, at 35.85 Euro/MWh.
The British day-ahead contracts was up 1.80 cents at 83.60 pence/therm.
Karsten Sander-Nielsen, senior analyst at Mind Energy, said that the gas market opened up bullish due to warmer forecasts and French concerns about nuclear power.
A largely high-pressure-dominated weather pattern bringing near- or above-normal temperatures and below-normal rain will likely last until the end of the month, LSEG meteorologist Georg Muller said.
Demand for air conditioning in the electricity sector is typically driven by hot weather.
A trader reported that reports of cracks in nuclear reactors run by EDF in French media had boosted power prices, and gas as well.
On Wednesday, the French power contract for the year ahead rose by as much as 8,3% to 68.00 Euros/MWh.
Analysts at Engie EnergyScan stated in a morning briefing that the Dutch gas prices also benefit from the need for liquefied gas to fill up storages.
They said that with the European gas storage levels being low, and a possible resumption in Russian pipeline flows becoming less likely due to new sanctions proposed by European Commission, Europe must continue to pay premiums to maximize its LNG purchases.
Gas Infrastructure Europe (GIE), based on its data, showed that European storage sites are currently 51.8% filled, a 20-point decline from the filling level at the same point last year.
The benchmark contract on the European carbon markets rose 1.86 euros to 74.52 euro per metric ton. This was also influenced by the concerns about the future French nuclear output. Nora Buli, reporting from Oslo; Nina Chestney, editing)
(source: Reuters)
