LONDON (Reuters) - British wholesale gas prices rose on Tuesday morning due to lower UK Continental Shelf flows and stronger demand from gas plants following nuclear outages and lower wind output.
Demand was forecast to be 261.6 million cubic metres (mcm) on Tuesday, while flows were seen at 231.3 mcm/day, National Grid data showed, leaving the system undersupplied by 30.3 mcm.
An outage started at St Fergus gas terminal early on Tuesday morning, which reduced receipts to the terminal by 5 mcm/day.
Gas-for-power demand was also forecast to be quite high at 63 mcm on Tuesday as outages at the Heysham 1-1 and Sizewell B-1 nuclear reactors and lower wind speeds pushed up demand for gas from gas-fired power plants.
Temperatures were forecast to turn colder from Saturday for three or four days before returning to normal levels.
Heating demand in Europe was expected to increase by about 29 percent year-on-year over the next two weeks, driven by higher demand from Britain and the Netherlands, said analysts at UK-based consultancy Energy Aspects.
“Going into summer, the questions are whether the markets will start to fall again and when that is likely to happen. Directionally at least, it is hard to find much bullish sentiment out there,” the analysts said in a research note.
Energy Aspects expects more liquefied natural gas supply during the summer but there will likely be lower Russian gas exports to Europe in the second half of the year.
The company sees average UK gas prices at 25-26 p/therm in the second quarter and 25 p/therm in the third quarter.
In the Dutch gas market, day-ahead prices at the TTF hub TRNLTTFD1 rose 20 cents to 11.15 euros per megawatt-hour.
In the European carbon market, front-year EU allowances CFI2Zc1 edged three cents higher to 5.61 euros a tonne.
Reporting by Nina Chestney; editing by David Clarke
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