(Bloomberg) -- European natural gas prices rose the most in more than a week as windless weather across the region bolsters demand for the fuel.
Benchmark futures settled 2.9% higher on Monday, the biggest gain since Oct. 25, after sliding at the end of last week. The UK equivalent contract also advanced.
The moves follow gains in oil, after OPEC+ agreed to push back its December production increase by one month and tensions escalated in the Middle East. Meanwhile, lower wind is forecast from Britain to Germany in the coming days. Gas-fired generation in the UK soared on Monday, making up for the plunge in wind output.
“Persistently low wind generation throughout the week is providing bullish pressure to prompt baseload contracts on increased reliance on gas-fired generation,” Inspired Plc said in a note.
Britain in particular is sensitive to shifts in weather and supply during winter because — unlike countries such as Germany — it lacks big gas storage sites. Liquefied natural gas deliveries to the UK and Europe as a whole have recently been lower than average for the time of year.
Still, European gas storage sites are still above the 95% mark, providing a cushion to the market.
“I think Europe is generally in a good shape, all the stocks are full, more than 90%,” Claudio Descalzi, chief executive officer of Italy’s Eni SpA, said at the Adipec conference in Abu Dhabi. “There are flows from the US, flows from Qatar, from North Africa.”
There is still a lot of LNG from Russia coming to Europe, Descalzi said. While Eni is not using Russian gas, the fuel is “coming into TTF,” he added, referring to the Dutch hub.
Dutch front-month futures, Europe’s gas benchmark, closed at €40.30 a megawatt-hour, while UK front-month gas settled 3.3% higher at 102.46 pence a therm.
--With assistance from Priscila Azevedo Rocha.
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