European natural gas prices moved higher amid a forecast for colder and calmer weather that could boost demand at a time when stockpiles are set to be refilled.
(Bloomberg) — European natural gas prices moved higher amid a forecast for colder and calmer weather that could boost demand at a time when stockpiles are set to be refilled.
Germany is set to see unusually low temperatures this week, while a cold spell is expected in the UK next week, according to forecaster Maxar Technologies.
Wind generation could dip next week in both nations, increasing the use of the fuel in power generation. Gas was the biggest source of electricity production in the UK on Tuesday morning, grid data show.
The region is beginning to replenish gas stockpiles, with inventories edging higher in recent days to about 57% full on average, data from Gas Infrastructure Europe show. Still, annual maintenance at Norwegian facilities and some other infrastructure next week could tighten supply.
“It is important to note that the downside potential is much smaller than the upside potential and investors should be prepared for a sudden swing, if conditions allow for it,” Alfa Energy said in a recent note. “Norwegian gas outages are propping up short term prices and prices are likely to be rangebound” through the week.
Benchmark futures rose 1.3% to €41.66 a megawatt-hour by 9:17 a.m. in Amsterdam. The contract has largely traded around that level in recent days. The UK equivalent increased 1.5%
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