European and British wholesale natural gas prices moved slightly higher on Wednesday as forecasts for cooler temperatures across Northwestern Europe coincided with continued additions to European gas storage.
The benchmark Dutch front-month gas contract rose 1.5% to €76.80 per megawatt-hour (MWh), trading near its recent multi-week highs.
In Britain, the equivalent wholesale gas contract increased 0.5% to 189.03 pence per therm.
Cooler Forecasts Bring Heating Demand Into Focus
Weather forecasts for Northwestern Europe have been revised towards lower temperatures over the coming weeks, potentially bringing forward the seasonal increase in heating demand across residential and industrial markets.
European Union gas storage facilities were approximately 73% full, according to the supplied information. Inventories have increased in recent weeks but remain below levels recorded at the same point last year.
The combination of cooler weather forecasts and lower year-on-year storage levels has kept expected winter demand in focus, although continued injections into storage have provided additional supply ahead of the heating season.
LNG Supply and Geopolitical Risks Remain in Focus
European gas markets are also monitoring security risks affecting Persian Gulf shipping routes and attacks on regional energy infrastructure, given the potential implications for seaborne liquefied natural gas supplies.
The market is additionally assessing the availability of LNG supplies and the reduction in Russian pipeline gas flows to Europe.
UBS recently raised its fourth-quarter target for the Dutch TTF gas price to €75/MWh, citing a slower recovery in LNG supply and the reduction in Russian pipeline gas.
Further changes in European gas prices are likely to remain sensitive to temperatures, storage levels and LNG availability during the winter period.
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