LONDON, Jan 31 (Reuters) - British and Dutch gas prices fell
on Monday as gas-for-power demand decreased due to stronger wind
output and an outlook for higher temperatures.
The Dutch day-ahead contract was down by 5.50
euros at 86.90 euros per megawatt hours (MWh) by 1025 GMT, while
the February contract was down by 5.50 euros at
86.70 euros/MWh.
In Britain, the day-ahead contract was down by
13.00 pence at 208.00 pence per therm and the contract for
immediate delivery went down by 10.00 pence to
210.00 pence per therm.
Analysts at Refinitiv said that in Europe, heating demand is
relatively stable, while gas-for-power forecast is softer due to
stronger renewables output.
Refinitiv data showed that higher wind output will reduce
gas-for-power demand in both Britain and Europe next week.
UK's National Grid said that on Saturday wind generated
51.8% of British electricity, more than nuclear at 15.1%, gas at
15.0%, solar at 1.4%, and coal at 1.2%.
"An upward revision in temperature forecasts for the end of
the week could weigh on prompt and near-curve contracts today
amid strong wind speeds. On the supply side, Norwegian gas
production is back at capacity level as the unplanned outage
affecting Troll ended over the weekend," said Engie's EnergyScan
in a morning note.
European gas demand is expected to decline this year as
continued high prices make coal more competitive for power
generation, while Asian demand growth could slow, the
International Energy Agency (IEA) said on Monday.
Gas flows from Germany to Poland via the Yamal-Europe
pipeline, which usually sends Russian gas westwards into Europe,
were steady over the weekend and on Monday morning, data from
German network operator Gascade showed.
Concerns over a potential Russian invasion to Ukraine and a
subsequent gas supply disruption still dominates sentiment.
However, Refinitiv analysts expect energy markets to calm
down a bit over the week as with Russian President Putin heading
to Beijing to join Winter Olympic opening ceremony this Friday,
it is most likely that any form of severe escalation at the
Ukraine/Russia border might not happen before his return later
this week.
In the European carbon market, the benchmark 2022 price
inched down by 0.85 euro to 88.37 euros a tonne.
(Reporting By Marwa Rashad; Editing by Nina Chestney)