Prices jump due to icy temperatures, low wind

British and Dutch prompt wholesale gas prices rose on Thursday morning as a snap of cold weather and low wind speeds increased gas demand for heating and power generation.

The Dutch benchmark contract for January (TRNLTTFMc1) was up 2 euros at 151 euros per megawatt hour (MWh) by 0945 GMT, Refinitiv Eikon data showed.

The British contract for immediate delivery (TRGBNBPWKD) was 20 pence higher at 395.00 pence per therm, while the day-ahead contract (TRGBNBPD1) rose by 8.50 pence to 390.00 p/therm.

Severe cold weather is expected across the United Kingdom and the icy temperatures could last until at least early next week.

Refinitiv analysts said falling temperatures and lower wind speeds have added to gas demand while lower imports of liquefied natural gas to the region have also supported the prices.

"Financial participants holding long positions will probably try to push their advantage to reach their 20-day high and 5-day high targets," said Engie EnergyScan analysts.

"Once targets are reached, prices could fall with profit taking by these financial participants."

Norwegian gas exports to Europe remained steady, but eastbound gas flows on the Yamal-Europe pipeline to Poland from Germany fell slightly, as did flows of Russian gas through Ukraine into Slovakia, pipeline operators data showed.

Britain's gas system was around 7 million cubic metres (mcm) over-supplied on Thursday, with supply forecast at 370 million cubic metres (mcm) and demand at around 363 mcm, National Grid data showed.

Peak wind generation was expected at around 9 gigawatt (GW) on Thursday but will fall to 5.6 GW on Friday, out of a total metered capacity of more than 22 GW, Elexon data showed.

In the European carbon market, the benchmark contract (CFI2Zc1) inched up by 0.09 euro to 88.16 euros a tonne.