EUROPE GAS-Prices rise amid lower wind generation

LONDON, Feb 5 (Reuters) - Benchmark British and Dutch wholesale gas prices rose on Thursday morning amid lower wind generation.

The benchmark Dutch contract for March at the TTF hub TRNLTTFMc1 was up 0.92 euro at 34.38 euros per megawatt hour, or $11.89/mmBtu, by 0911 GMT, LSEG data showed.

The Q2 price TRNLTTFQc1 was up 0.82 at 31.00 euros/MWh.

In the British market, the day-ahead contract TRGBNBPD1 rose by 1.48 pence at 84.38 p/therm.

Wind power generation in north-west Europe is below normal which is supporting demand for gas from power plants.

Average temperatures are rising, likely reaching a peak on Sunday, but colder conditions are expected from February 13, LSEG data showed.

"Despite above-normal temperatures in most European countries, low gas stock levels continue to raise concerns," said analysts at Engie EnergyScan.

Summer-winter price spreads do not incentivise storage injections at the moment. EU gas stocks are expected to deplete to 26% by the end of March which will mean strong injections will be needed over the summer to begin next winter season at 90% full, said analysts at BNP Paribas this week.

But summer TTF prices are over-valued and a downward adjustment in the second quarter would incentivise more injections, they said.

"Given this correction and the forecast of significant new LNG supply to the market, we expect EU gas market volatility to settle down through Q2 – until the next winter starts," they added.

Estimates from S&P Global Energy, Kpler and Rystad Energy forecast at least 35 million metric tons of new liquefied natural gas capacity coming online this year, primarily from the United States and Qatar.

This could lift global LNG supplies by up to 10% year-on-year.

LNG arrivals to north-west Europe this week are expected to reach nearly 1.9 billion cubic metres, which would be a weekly high for this season so far and 1 bcm higher than last week, LSEG data showed.

Traders are also monitoring Ukraine-Russia peace talks in Abu Dhabi which started their second day on Thursday.

In the European carbon market, the benchmark contract CFI2Zc1 was down 0.84 euro at 82.08 euros a metric ton.