British and European wholesale gas prices rose on Wednesday on expectations for lower supplies from Russia and forecasts of cold weather in coming days. The British day-ahead contract was 22.50 pence higher at 181.50 p/therm by 0834 GMT. The British wholesale gas for October delivery rose by 11 pence to 212.00 p/therm.
The October gas price at the Dutch TTF hub, a European benchmark, was up 4.70 euros at 84.00 euros per megawatt hours (MWh). Supplies of Russian gas via the Yamal-Europe pipeline have increased by around 60% on Wednesday, according to data from grid operator Gascade, after a sharp drop on the previous day.
"We expect the exports via the Yamal pipeline to drop again from Oct 1 ... due to little capacity booked at Mallnow for next month," Refinitiv analysts said. "Flows at Mallnow are nominated slightly up this morning, but still significantly below their Monday’s level," said analysts at Engie EnergyScan. "This could continue to lend support to European gas prices today. However, technical resistances of 80.589 euros/MWh on TTF ICE October 2021 and 49.520 euros/MWh on TTF ICE Cal 2022 could contribute to limit gains," they added.
A decline in Norwegian flows, due to planned maintenance at Emden terminal, has already been priced in and is not expected to have effect on prices today. But prices also found some support as temperatures in Britain were expected to drop below seasonal normal levels on Wednesday and Thursday, while next week will continue with the partially wet and windy weather.
However, Britain's gas system was 9 million cubic metres (mcm) over-supplied on Wednesday, with supply forecast at 229 million cubic metres (mcm) and demand at around 220 mcm, National Grid data showed.
Peak wind power generation was forecast at around 11 gigawatts (GW) on Wednesday, rising to almost 12.5 GW on Thursday, Elexon data showed. Higher wind output typically reduces gas demand from power plants.
The benchmark Dec-21 EU carbon contract was up 0.82 euro at 62.74 euros per ton.
Modern society would not be possible without the use of pipelines to transport natural gas, crude oil and finished products to demand centers.
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May 4, 2021 10:00 AM CDT