Prices of gas in Europe are rising as Norwegian supplies increase.

The Dutch and British gas wholesale prices were trading in a narrow band early on Tuesday, as the higher temperatures in Europe restricted heating use. Meanwhile, the cooling demand and low winds generation mainly affected the power market.

LSEG data shows that the benchmark Dutch front-month contract was up 0.37 euros at 33.40 Euro per megawatt-hour or $11.55/mmBtu at 0848 GMT.

The Dutch day-ahead contract increased by 0.25 euros to 32.38 Euro/MWh.

The British day-ahead contract fell 0.25 pence to 78.00p/therm.

The heatwave that has been sweeping Europe will likely end on Thursday. According to LSEG, the demand for gas heating will be down 32 gigawatt hours per day on Thursday.

The benchmark European electricity prices exceeded 100 euros per Megawatt Hour on Monday, the first time they have done so since April.

Norwegian gas supplies were ample after maintenance.

LSEG data revealed that the total Norwegian export nominated was 317 million cubic meters per day, with 259 mcm/d destined to the Continent.

Ulrich Weber, LSEG analyst, said: "Weather fundamentals remain largely unchanged. The heatwave and low winds power generation continue to affect mostly the European electricity market."

Weber predicted that the gas market would be supported, but prices wouldn't be pushed higher because France's Montoir lowered its nominations by 55 GWh/d for the first six months of this month. The flow of gas from Germany to the Czech Republic is expected to be 90 GWh/d more, while Slovakia will receive 131 GWh/d.

The European net storage injections fell on Monday and are expected to fall again on Tuesday. Gas Infrastructure Europe data shows that storage inventories are at 58.59% capacity.

The benchmark carbon contract in Europe was down by 0.71 euros at 70.25 euro per metric ton. (Reporting by Marwa Rashad, Editing by Barbara Lewis.)

(source: Reuters)