Prices rise on TurkStream attack news, wider supply concerns
Jan 13 (Reuters) - Dutch and British wholesale gas prices gained on Monday, fuelled by reports of attempted attacks on Russian gas pipelines, low storage levels, fresh U.S. sanctions on Russian energy and forecasts for colder, less windy weather.
The benchmark front-month contract at the Dutch TTF hub was up 1.78 euros at 47.19 euros per megawatt hour (MWh), or $14.11/mmBtu, by 1021 GMT, LSEG data showed.
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The British front-month was up 6.82 pence at 120.07 p/therm.
Further in, the Dutch day-ahead price was up 1.77 euros at 47.60 euros/MWh, while its British equivalent was up 7.50 pence at 122.00 pence per therm.
Prices are likely reacting to as yet unverified claims by Moscow that Ukraine tried to attack part of the infrastructure of the TurkStream pipeline, which transports Russian gas to Europe via Turkey, a trader said.
The route is the last remaining option for Russian gas flows to Europe after transit via Ukraine stopped at the start of this year.
Curve prices already factored in the United States imposing some of the toughest sanctions on the Russian oil industry to date, analysts at Engie EnergyScan said in a morning report.
While mostly impacting oil prices, it could also increase Asian buyers' willingness to pay more for liquefied natural gas (LNG), increasing competition with European buyers, they added.
"We expect prices to glean support from the latest weather forecast developments since Friday that have lifted (local distribution zone) LDZ demand expectations," LSEG analyst Wayne Bryan said.
This applied particularly to demand for the weekend and next week, while wind generation would soften in tandem, further supporting prices, he added.
"The ramp up in demand will lead to further draws on storage and should see the SUM-25 contract deepen its backwardation to the WIN-25 contract," Bryan said.
Europe's gas storages sites are 66.38% full, about 16 percentage point below the level a year ago, data from Gas Infrastructure Europe showed.
The need to replenish gas storage after the winter is lifting summer prices over those for next winter, with the spread seen at 2.55 euros/MWh, up 20% from Friday, according to LSEG data.
In the European carbon market, the benchmark contract was up 1.65 euros at 76.50 euros a metric ton.
(Reporting by Nora Buli in Oslo; Editing by Emelia Sithole-Matarise)