Europe's benchmark natural gas prices rose in the early afternoon in Amsterdam as lower wind speeds across Europe are set to reduce wind power generation amid a massive heatwave in many parts of the continent.
The front-month futures at the TTF hub, the benchmark for Europe's gas trading, traded at $30.73 (27.48 euros) per megawatt-hour (MWh) as of 1:30 p.m. GMT on Thursday, rising by 1.9% on the day.
As demand for gas from power plants increased and wind speeds slowed, demand for gas-fired power generation has grown over the past day.
The return of high supply from top gas supplier Norway limited gains and gas prices fluctuated earlier in the day, after opening 6% lower on Thursday.
Norway is now Europe's single largest gas supplier after Russia cut off pipeline supply to most of its EU customers after the invasion of Ukraine.
Wind power generation in Germany is expected to slump on Friday to 3.5 gigawatts (GW), and the UK's peak wind power generation on Thursday and Friday is expected at 2.6-2.8 GW, out of a total capacity of 22 GW, according to data from analysts cited by Reuters.
"With storages filling, demand remaining soft, and supply from Norway recovering we expect rangebound trading to continue on the prompt in the absence of any supply disruption or demand surprises," Reuters quoted Refinitiv analyst Wayne Bryan as saying in a daily note.
Weak demand from industry and high inventories - with EU gas levels in storage significantly higher than the five-year average and the levels from this time last year - have also weighed on the benchmark European prices.
The EU gas storage sites were 82.33% full as of July 18, according to data from Gas Infrastructure Europe.
Meanwhile, market participants have become more bearish on European gas, with net shorts in the TTF contract rising last week for the first time in more than four weeks, per data from the exchange operator cited by Bloomberg.
By Michael Kern for Oilprice.com
Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More
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