EUROPE GAS-Prices rise on supply concerns, wind forecasts
LONDON, May 23 - British and Dutch wholesale gas prices rose on Thursday morning due to concerns around supply and a drop in wind power output from tomorrow.
In the British market, the front-month contract was 3.90 pence higher at 86.70 p/therm by 0945 GMT, while the July price rose by 5.41 pence to 84.40 pence/therm, LSEG data showed.
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Total Norwegian exports to Britain are down by 26 million cubic metres (mcm) at 32 mcm/day as volumes have been re-routed to continental Europe.
UK gas-for-power demand is forecast to rise for the day ahead by 22 mcm to 47 mcm/day as wind output is expected to fall, LSEG analysts said.
Peak wind generation in Britain is forecast at 14.5 gigawatts (GW) on Thursday and 6.9 GW on Friday, Elexon data showed. Lower wind output typically increases demand for gas from power plants.
British Prime Minister Rishi Sunak called a national election on Wednesday for July 4, which the Conservative party is widely expected to lose to the opposition Labour Party after 14 years in power.
In the Dutch market, the benchmark front-month contract TRNLTTFMc1 was 1.16 euros higher at 35.95 euros per megawatt hour (MWh), its highest level since the end of Dec. 2023.
Wind speeds are expected to drop sharply in north-west Europe also from tomorrow, especially in Germany where it is expected to drop below the seasonal average for the next couple of weeks, LSEG data showed.
Although Norwegian supply has rebounded to continental Europe and it is expected to return close to maximum levels when the end of maintenance outages early in June, there is still some concern around wider supply.
In the United States, one of the companies building the Golden Pass LNG export plant has filed for bankruptcy, citing challenges at the project, which could push back the start-up date.
In addition, Austrian oil and gas group OMV said on Wednesday that gas supplies from Russia's Gazprom may be suspended in connection with a foreign court ruling, without identifying the case. Austria is heavily dependent on Russian gas.
(Reporting by Nina Chestney )