Gas prices in Europe are rising in anticipation of a cooling down caused by speculators

LONDON, March 29 (Reuters) – Wholesale gas prices in the UK and the Netherlands rose on Wednesday as Europe is expected to cool off from the end of the week. At the same time, concerns about increased demand from China stimulated purchasing activity.

Gas futures fronts at the Dutch TTF hub rose 1.05% to €43.35 per megawatt hour at 12:21 p.m. Moscow time. The price of gas with “tomorrow” settlements on the TTF until 11:28 Moscow time increased by 5.7% to 44.1 euros per megawatt hour.

The cost of gas billed ‘tomorrow’ in the UK by 12:27pm Moscow time rose 1.54% to 99p a term, while ‘instant delivery’ by 11:20am Moscow time fell by 1.9% to 103p a term term.

UK gas futures for delivery next month rose 2.59% to 108.35p a term.

The move is speculative, a gas trader said, amid early forecasts of cooler weather in Asia next winter. As a result, demand may increase, as will competition for liquefied natural gas.

“We see some speculative moves as the current fundamentals are bearish in perspective,” the trader added.

A very warm Thursday is expected across the UK and north-west Europe, averaging around 12 degrees Celsius. However, starting Friday, temperatures could start dropping to seasonally normal next week, according to Refinitiv Eikon data.

Wind generation in the UK and north-west Europe is expected to pick up on Thursday before dropping early next week. Low levels of wind energy production usually lead to increased gas demand from power plants.

Engie EnergyScan analysts note that today’s upward momentum was driven by an increase in electricity futures contracts in Europe.

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(Marwa Rashad)