EUROPE GAS-Prices edge higher on cooler weather and Asia LNG competition
LONDON, July 1 (Reuters) - Dutch and British wholesale gas prices edged higher on Monday, supported by expectations of cooler temperatures in Europe and strong competition with Asia for cargoes of liquefied natural gas (LNG).
The benchmark front-month contract at the Dutch TTF hub was up 0.55 euros at 34.95 euros per megawatt hour (MWh), or $11.01/mmbtu, by 0808 GMT, LSEG data showed.
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The Dutch day-ahead contract was up 0.75 euros at 34.60 euros/MWh.
In the British market, the front-month contract rose by 1.9 pence to 82.9 pence per therm.
“Lower temperatures are expected for this week due to complex low pressure systems over Western Europe. They will drop 4 degrees Celsius below seasonal average,” Engie Energy Scan analysts said in a daily research note.
The cooler temperatures are likely to boost local distribution zone (LDZ) gas demand.
Analysts at LSEG said LDZ demand is expected to increase by 110 gigawatt hours/day (GWh/d) to 806 GWh/d on Monday.
Prices were also buoyed by strong demand for LNG in Asia, which means European prices need to remain strong to attract cargos.
"Asian temperatures are also forecast to remain high, which has been driving LNG spot demand of late. In turn, this has held up European market prices as we compete for deliveries – which have been limited in recent weeks," consultancy Auxilione said in a daily market note.
Supply of gas to Europe from Russia via Ukraine remained stable.
Russia's Gazprom said it would send 42.1 million cubic metres (mcm) of gas to Europe via Ukraine on Monday, in line with recent volumes.
In the European carbon market, the benchmark contract rose by 1.67 euros to 69.14 euros per metric ton.
(Reporting by Susanna TwidaleEditing by David Goodman)