Prices rise on shrinking stocks and cooler outlook

Jan 23 (Reuters) – Dutch and British wholesale gas prices rose on Thursday, as cold weather added to concerns about the difficulty of refilling fast-depleting gas stocks and offset the impact of signs of a restart at the U.S. Freeport export plant.

The benchmark front-month contract at the Dutch TTF hub was up 1.63 euros at 50.40 euros per megawatt hour (MWh), or $15.38/mmbtu, by 0952 GMT, LSEG data showed.

The Dutch day-ahead contract was up 1.23 euros at 50 euros/MWh.

In Britain, the front-month NBP contract gained 3.73 pence to 126.85 p/therm, while the day-ahead contract was up 3.75p at 128 p/therm.

The market had expected the gas storage withdrawal rate to slow, which has yet to happen.

Europe’s gas storage sites are 58.5% full, already below the level left in stock after the end of the previous, mild, winter, data from Gas Infrastructure Europe showed.

With storage at just 58-59% and little flexibility in supply, any disruption to the refill period will add to European gas prices, one trader said.

Italy’s energy minister said on Thursday the country plans to make an early start on filling strategic gas stockpiles, as it expects gas wholesale prices to spike in the summer.

Europe will likely need to attract over 100 cargoes of additional liquefied natural gas (LNG) to bridge the filling gap compared with 2024, resulting in unusually high prices for the lower demand summer months.

The TTF summer contract last traded at a 5.48 euros premium to winter 25/26, LSEG data showed.

Demand is also likely to stay firm, with latest weather forecasts indicating cooler temperatures for the period of Jan. 28-Feb.5, LSEG analyst Yuriy Onyshkiv said.

European prices have also drawn support this week from an outage at the Freeport LNG plant, the second-largest U.S. LNG export facility, due to power cuts amid a winter storm in Texas.

Power has been restored and gas has started flowing to the plant again, removing the risk of an LNG supply drop from the U.S in the near term, Onyshikv said.

In the European carbon market, the benchmark contract was up 2.51 euros at 81.45 euros a metric ton.

(Reporting by Nora Buli in Oslo; editing by Barbara Lewis)