UK GAS-Prices rise as wind power dips, stronger oil boosts curve

• Traders said the market remains fundamentally weak but expectations of higher demand for gas from power plants as wind power output dips and stronger oil prices buoy the market.
• Peak wind power generation is forecast at 7.2 gigawatts (GW) on Tuesday, falling to 5.4 GW on Wednesday, Elexon data showed.

LONDON: Prompt British wholesale gas prices edged higher on Tuesday morning with output from the country's wind farms forecast lower, while contracts along the curve were supported by gains in oil markets.

The within-day contract was up 0.10 pence at 16.40 p/therm by 0851 GMT.

The day-ahead contract was up 0.60 pence at 16.60 p/therm.

Traders said the market remains fundamentally weak but expectations of higher demand for gas from power plants as wind power output dips and stronger oil prices buoy the market.

Peak wind power generation is forecast at 7.2 gigawatts (GW) on Tuesday, falling to 5.4 GW on Wednesday, Elexon data showed.

"Gas for power day-ahead demand forecast is at 54 mcm/d (million cubic metres/day), up by 8 mcm/d from previous forecast. Within-day model forecast is 48 mcm/d, up by 15 mcm/d," analysts at Refintiv said in a daily research note.

Stronger prices came despite an oversupplied market, caused in part by higher output from the country's liquefied natural gas (LNG) terminals.

Britain's gas system was oversupplied by 14.6 mcm with demand forecast at 204 mcm and flows at 218.6 mcm/day, National Grid data showed.

Flows from Britain's LNG terminals were at 77 mcm on Tuesday, up 13 mcm on the previous day.

Oil rose on Tuesday amid hopes that the world's biggest producers of crude will agree to cut output as the novel coronavirus pandemic crushes demand.

The May gas contract was up 0.63 p at 17.55 p/therm.

The Winter 2020 contract was up 0.59 p at 34.43 p/therm.

The day-ahead gas price at the Dutch TTF hub was up 0.22 euro at 7.35 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract was up 0.73 euro at 21.13 euros per tonne.