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Europe’s benchmark natural gas prices at the Dutch TTF hub were headed for a weekly gain early on Friday, supported by estimates of lower nuclear power output in France and forecasts of upcoming colder weather after a very warm start to the heating season.
Prices began to rise on Thursday after weather forecasts pointed to a colder-than-normal spell coming to northwest Europe by December. Maintenance at some gas export facilities in Norway and France’s EDF revising down its nuclear power output, again, also supported prices on Thursday and early on Friday.
At around 11 a.m. in Amsterdam on Friday, the TTF front-month prices had paired gains after a jump in earlier trade, but they were still poised for a weekly gain, after touching a four-month low in recent weeks.
On Thursday, EDF revised down its estimate for the 2022 French nuclear output to 275-285 TWh, compared to the previous estimate of 280-300 TWh.
This lowered estimate takes into account the impact of strikes on maintenance schedules in the autumn of 2022, as well as outage extensions at four nuclear reactors involved in the program of inspections and repairs related to the stress corrosion phenomenon, EDF said in a statement.
The benchmark gas prices fell earlier this week and stayed below $97 (100 euros) per MWh as a warm October has allowed for more injections into storage instead of withdrawals. The comfortable storage levels, the high rate of LNG imports, and the mild weather in October and early November have eased concerns about gas supply and demand balances in the early part of the heating season. In fact, milder weather across most of Europe has postponed the start of the heating season.
While concerns about the next weeks may have been allayed to a large extent, Europe’s gas supply situation remains precarious for next year.
The International Energy Agency (IEA) said on Thursday that “Europe needs to take immediate action to avoid risk of natural gas shortage next year.” Europe could face a gap of as much as 30 billion cubic meters (bcm) of natural gas during the key summer period for refilling its gas storage sites in 2023, the IEA said in a new analysis.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.