UK GAS-Prompt prices mixed amid LNG delays, milder weather forecast

• Britain's gas system was undersupplied by 25.2 million cubic metres (mcm), with demand forecast at 279.3 mcm and supply at 254.1 mcm/day, National Grid data showed.
• Temperatures are forecast to rise to 9.3 degrees Celsius by weekend from 5.1C on Wednesday, likely impacting gas demand.
• The day-ahead gas price at the Dutch TTF hub was down 0.17 euro at 9.48 euros per megawatt hour.

LONDON: Prompt British wholesale gas prices were mixed on Wednesday morning amid a drop in liquefied natural gas (LNG) sendout and expectations of lower demand due to milder weather later in the week.

The day-ahead contract rose by 0.10 pence to 23.75 p/therm by 0920 GMT.

Britain's gas system was undersupplied by 25.2 million cubic metres (mcm), with demand forecast at 279.3 mcm and supply at 254.1 mcm/day, National Grid data showed.

There was a 15 mcm day-on-day drop in LNG sendout to 43 mcm on Wednesday caused by delays in vessel discharges due to strong wind.

"According to the latest weather forecast, the strong wind situation may ease by this weekend," Refinitiv analysts said in a morning note.

Overall LNG supply remains strong however, with 16 tankers expected at British terminals by March 2, with more than half of those coming from the United States.

Pipeline flows from Norway and the UK Continental Shelf were almost unchanged day-on-day on Wednesday.

The within-day contract fell by 0.40 pence to 23.70 p/therm.

On the demand side, residential consumption is expected to increase slightly on Wednesday, with temperatures predicted colder than in the previous day, Refinitiv data showed.

However, temperatures are forecast to rise to 9.3 degrees Celsius by weekend from 5.1C on Wednesday, likely impacting gas demand.

Gas-for-power demand is also expected to fall in the next several days.

Wind generation is forecast at 13.5 gigawatts (GW) on Wednesday and almost 14 GW on Thursday, Elexon data showed.

Further out on the curve, the March contract was up 0.15 p at 22.40 p/therm.

Curve contracts, in particular those for spring and summer delivery are expected to ease, however, pressured by full storages and ample LNG supply, a gas trader said.

The day-ahead gas price at the Dutch TTF hub was down 0.17 euro at 9.48 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract was up 0.13 euro at 25.27 euros per tonne.