UK GAS-Prices heat up as wind power dips and temperatures soar

Usama Fayyaz July 24, 2019

LONDON: British wholesale gas prices mostly rose on Wednesday morning, with wind power generation expected to dip while a heatwave is expected to lead to increased demand for gas from power plants.

Within-day gas rose 0.95 pence to 29.35 pence per therm by 0747 GMT.

Day-ahead gas was up 0.50 pence at 29.50 p/therm.

“High temperatures mean there should be strong power demand,” one gas trader said.

Some parts of the south east of the country are expected to hit record July temperatures approaching 38 degrees Celisus, according to Met Office forecasts, lifting power demand for air conditioning.

Average temperatures across Britain are expected at 23 degrees Celsius on Thursday, Eikon Refinitiv data showed.

Peak wind power generation was forecast at 7.7 gigawatts (GW) on Wednesday, falling to 6.8 GW on Thursday.

Traders also said that bullish European carbon prices had buoyed gas.

The Benchmark Dec-19 EU carbon contract was down 0.15 euros at 29.66 euros a tonne but remained near 13-year highs reached on Tuesday.

The UK gas system was undersupplied by 3.8 million cubic metres (mcm), with demand forecast at 151.3 mcm and flows at 155.1 mcm/day, National Grid data showed.

The August contract was down 0.4 pence at 28.90 p/therm.

The August gas price at the Dutch TTF hub was down 0.15 euros at 12.55 euros per megawatt hour.

Copyright Reuters, 2019

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