Europe gas prices edge up on lower temperatures, less renewables output
UNG•Dutch and British wholesale gas prices edged higher as colder temperatures and lower renewable output are expected to lift demand. Morgan Stanley raised its winter TTF forecast to €90 per MWh and said prices could reach €135 per MWh under a combination of supply disruptions and colder weather.
1. Prices and forecasts
The Dutch front-month gas contract rose €0.42 to €86.85 per MWh, while the British front-month contract gained 0.71 pence to 214.36 pence per therm. Prices had reached four-year highs earlier in the week before easing from Wednesday.
2. Demand and supply
Gas-for-power demand is expected to increase by 367 gigawatt hours per day to 2,404 GWh/d, with lower solar output also expected to support demand over the weekend and next week. North-west European LNG send-out fell by 157 GWh/d to 1,884 GWh/d as nominations at French terminals Montoir and Fos declined; Norwegian pipeline exports were slightly higher.
3. Winter storage risks
Morgan Stanley said European gas storage could enter winter at 74%, a record low, despite recent warm weather and a recovery in Gulf LNG flows to 30% of pre-conflict levels. The bank said its €135/MWh scenario could result from a prolonged Qatar outage, colder weather or other LNG disruptions.
