European gas prices rise as colder temperatures loom

British and Dutch wholesale gas prices rose on Tuesday morning as forecasts for cooler temperatures stoked demand and ongoing fears over supply lifted the market.

The British day-ahead contract was up 4.50 pence at 2.08 pounds /therm by 0936 GMT. The British weekend contract TRGBNBPWE> was up 10.50 pence at 2.07 pounds/therm.

The November gas price at the Dutch TTF hub, a European benchmark, was up 2.50 euros at 86.25 euros/megawatt hour. Traders said forecast for colder weather had lifted demand, while concerns over few deliveries of liquefied natural gas (LNG) into Europe and rises in prices across the energy complex had lifted gas.

“Temperatures in the UK will stay near the seasonal normal over the week and fall below the seasonal normal towards the weekend,” analysts at Refinitiv said in a daily research note. Average temperatures in Northwest Europe are forecast to be below seasonal norms this week, the analysts said.

Oil prices were approaching a three-year high on Tuesday, supported by a rebound in global demand that is contributing to energy shortages in big economies such as China. To try to protect its gas supplies amid rising competition globally the European Union will look into an option for member states to jointly buy natural gas, a draft document seen by Reuters showed on Monday evening.

The British November gas price was up 3.44 pence at 2.20 pounds per therm. The benchmark Dec-21 EU carbon contract was down 0.19 euro at 58.96 euros/t. The benchmark Dec-21 British carbon contract was down 0.17 pounds at 63.75 pounds/t.

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