British wholesale gas prices fell on Thursday as sharply higher wind power generation weighed on gas-for-power demand in a market that was already expected to be slightly oversupplied.

Day-ahead gas was 1.4 pence lower at 25.70 pence per therm by 0745 GMT.

Within-day gas fell 0.9 pence to 25.80 pence per therm.

The gas system was expected to be a touch oversupplied, with demand forecast at 145.7 million cubic metres (mcm) and supply seen at 149.8 mcm.

Peak wind generation is forecast to double from 5.3 gigawatts (GW) on Thursday to 10.4 GW on Friday out of a total metered capacity of 12 GW and is expected to remain high over the weekend.

The weekend gas contract was also down, falling 1 pence to 25 pence per therm.

Strong winds can reduce demand for gas used in power generation; Refinitiv analysts slashed their forecast by 21 mcm to 25 mcm for Friday and reduced it by 5 mcm to 22 mcm for the weekend.

Supplies of gas were stable, with a small rise in flows from the UK Continental Shelf offsetting an equally small reduction in flows along the Langeled pipeline from Norway.

Several planned outages were also expected to end in the coming days, increasing production.

Work on the Forties oil and gas system offshore Britain and the Norwegian Troll field is expected to end on Friday, although Troll will undergo another shutdown this month.

The falls across the British and Dutch curves reflect the broader trend of weak European gas markets this year due to abundant supply, especially in the form of LNG.

The month-ahead contract fell 0.45 pence to 31 pence per therm.

Dutch day-ahead gas fell 0.28 euro to 9.45 euros per megawatt hour while the September contract was down 0.15 euro at 11.18 euros/MWh.

The benchmark EU carbon price was 0.31 euro higher at 28.59 euros a tonne.

Copyright Reuters, 2019

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