- he British wholesale gas for November delivery rose by 17.25 pence to 236.25 p/therm
- However, Britain’s gas system was about 18 million cubic metres (mcm) over-supplied on Thursday
British and European wholesale gas prices extended their rally on Thursday morning on supply concerns, forecasts of cold weather and short-covering ahead of the official start to the winter gas season on Friday, when heating demand picks up.
The British wholesale gas for November delivery rose by 17.25 pence to 236.25 p/therm, while the October gas price at the Dutch TTF hub, a European benchmark, was up 3.75 euros at 90.25 euros per megawatt hours (MWh).
“Flows from Russia are reduced and the supply fears are growing further. Both on the day ahead market and on long-term contracts, prices are climbing rapidly, and the fiercely bullish sentiment affects all the related markets heavily,” Energi Danmark said in a research note.
Temperatures in Britain were expected to drop below seasonal normal levels on Thursday, and next week will continue to see partially wet and windy weather.
Local distribution zone (LDZ) consumption, which mostly reflects heating, is expected to rise by 28 million cubic metres (mcm) to 96 mcm per day, as heating demand starts picking up, Refinitiv analysts said in a weekly report.
However, Britain’s gas system was about 18 million cubic metres (mcm) over-supplied on Thursday, with supply forecast at 227 million cubic metres (mcm) and demand at around 209 mcm, National Grid data showed.
Britain has been contending with gas supply shortages in recent weeks, which has led to the collapse of some suppliers in the country and concerns of a winter energy crisis.