Prices of gas in Europe rise amid lower wind power generation
On Thursday morning, the benchmark British and Dutch wholesale gasoline prices increased due to lower wind generation.
The benchmark Dutch contract at the TTF hub for March was up 0.92 euros to 34.38 euros per megawatt hour or $11.89/mmBtu by 0911 GMT.
The price of MWh in?Q2 was 31.00 euros/MWh, up by 0.82.
The day-ahead contract in the British market rose 1.48 pence to 84.38p/therm.
The wind power production in North-West Europe is lower than normal, which supports the demand for gas generated by power plants.
LSEG data indicated that temperatures will be colder from February 13 onwards.
Analysts at Engie EnergyScan said that despite temperatures being above normal in many European countries, the low levels of gas stocks continue to be a concern.
Currently, the price differentials between summer and winter do not encourage storage injections. Analysts at BNPParibas said this week that EU gas stock levels are expected to drop to 26% by March, which means strong storage injections over the summer will be needed to start the winter season with 90% of the capacity.
They said that summer TTF prices were overvalued, and a decrease in second-quarter TTF prices would encourage more injections.
They added that "given this correction and forecasts of significant new LNG supplies to the market, it is reasonable to expect EU gas volatility to calm down until Q2 -- or the start of the next winter."
S&P Global Energy estimates that at least 35 millions metric tons of liquefied gas will be added to the market this year. This capacity is primarily coming from the United States, but also Qatar.
The global LNG supply could increase by up to 10% per year.
LSEG data shows that LNG arrivals in north-west Europe are expected to reach 1.9 billion cubic meters this week. This would be a record for the season and a 1 bcm increase over last week.
The traders are also watching the peace talks between Ukraine and Russia in Abu Dhabi, which began their second day Thursday.
The benchmark contract on the European carbon markets was down by 0.84 euros at 82.08 euro per metric ton. Nina Chestney reports.
(source: Reuters)
