Prices hit highest this year as temperatures drop

Dutch and British wholesale prices rose to their highest levels this year on Monday, supported by colder weather forecasts and concerns over the rate of withdrawal from gas storage sites.

The benchmark front-month contract at the Dutch TTF hub (TRNLTTFMc1) rose by 1.70 euros to 43.85 euros per megawatt hour (MWh), or $13.68/mmbtu, by 1315 GMT, its highest level since Dec. 1, LSEG data showed.

The British front-month (TRGBNBPMc1) was up by 2.95 pence at 110.45 pence per therm, after earlier rising to 110.85 p/therm - the highest since Nov. 27.

The day-ahead contract (TRGBNBPD1) was up 4.60 pence at 110.75 pence per therm.

"Temperature runs (this morning) moving even lower is the main reason today (for the rise)," a trader said.

Local distribution zone (LDZ) demand for Britain was forecast to rise by 18 million cubic metres (mcm) per day for the day-ahead contract, and by 52 mcm/day for working days next week, LSEG analyst Timothy Crump wrote in a morning note.

With colder weather and rising demand, there are also steady withdrawals from gas storage.

"EU gas storage has already fallen to 93%, concerningly early in the withdrawal season, as European gas demand jumped by 40% on the back of low wind and early cold temperatures," analysts at Northern Gas and Power said in a daily brief.

European sites were last 93.58% full, down 0.20 points day-on-day, data from Gas Infrastructure Europe (GIE) showed.

This left it just above the five-year average, but below the more than 99% full it was at the same stage last year, analysts at ING said.

Still, flows of pipeline gas to Europe and Britain are marginally up on Monday.

Nominations of Norwegian gas flows to Europe and Britain stood at 346 million cubic metres (mcm) on Monday morning, their highest since Aug. 5, data by infrastructure operator Gassco showed.

Russian producer Gazprom GAZP said it would send 42.3 mcm of gas to Europe via Ukraine on Monday, compared with 42.2 mcm on Friday.

European imports of liquefied natural gas rose 17% month-on-month, likely driven by pre-winter restocking, Kaushal Ramesh, a vice president at Rystad Energy said in a note.

In the European carbon market (CFI2Zc1), the benchmark contract inched up by 0.03 euro to 68.05 euros a metric ton.