Jan 24 (Reuters) - British and Dutch gas prices rose on
Monday morning, buoyed by rising tensions over a possible
Russian invasion of Ukraine.
The Dutch price for February, the European
benchmark contract, was up 4.20 euros by 0920 GMT at 83.50 euros
per megawatt hour (MWh).
"Mild weather forecasts and high LNG imports changed
the fundamental situation on the market, but the tensions
surrounding Russia continue to offer some nervousness," analysts
at Energi Danmark said in a morning note.
With fears of a new war in Eastern Europe rising, so could
gas prices, they added.
Britain has started pulling embassy staff out of Ukraine
after warning over the weekend that Moscow was planning to
install a pro-Russian government in Kyiv, with the U.S. telling
diplomats' families to leave Ukraine.
Western allies are sounding out possible sanctions against
Russia in the event of a Ukraine invasion, including options
that could disrupt gas supplies.
Russian supplies via the Yamal-Europe pipeline, which
usually sends Russian gas west into Europe, from Germany to
Poland, have been in flowing in the opposite direction for over
a month now, data from German network operator Gascade showed on
Monday.
The British contract for day-ahead gas was up
12.50 pence at 202.50 pence per therm and its Dutch counterpart
up 3.79 euros at 84.29 euros/MWh.
The UK system was under-supplied on Monday morning, with
demand forecast at 342 million cubic metres (mcm) per day and
supply at 338 mcm/day, National Grid data showed.
Slower arrivals of liquid natural gas (LNG) this week and
strong gas for power demand for Monday forecast at 101 mcm per
day could support prices, analysts at Refinitiv said.
Peak wind generation is forecast to drop from 5.9 gigawatts
(GW) on Monday to 4.6 GW on Tuesday, out of total metered
capacity of 19.5 GW, Elexon data showed.
However, wind speeds will pick up later this week, as will
temperatures following a brief drop on Tuesday, although lower
consumption is still being mitigated by the record low European
inventories, Refinitiv's analysts said.
By Jan. 22, European gas storages were 43% full on average,
compared to 56% at the same time last year, showed data by Gas
Infrastructure Europe.
In the European carbon market the benchmark 2022 contract
was up 1.55 euros at 86.02 euros/tonne.
(Reporting by Nora Buli in Oslo; editing by Nina Chestney)