Prices strengthen as gas field outage extended

Madiha Shakeel August 21, 2019

LONDON: British wholesale gas prices rose on Wednesday, despite an oversupplied market, as an unplanned outage at a gas field was extended.

* Day-ahead gas price up 0.7 pence at 28.00 p/therm by 0755 GMT.

* Month-ahead gas price was 0.59 pence higher at 32.10 p/therm.

* Within-day gas price was yet to trade.

* The system is oversupplied with demand forecast at 144.8 million cubic metres (mcm) and supply seen at 153.1 mcm, National Grid data showed.

* An unplanned outage at the Culzean gas field offshore Britain had been extended until Thursday after there were issues starting a compressor which impacted export, according to a REMIT message.

* Traders said it was difficult to judge the market as many players were taking positions as they were caught between bullish factors — such as planned and unplanned maintenance work — and bearish factors.

* “We’re probably just a touch more bullish than bearish today but it’s marginal,” one trader said.

* Flows from Norway and the send-out rates from liquefied natural gas terminals are otherwise stable.

* “Markets are choppy,” another trader said adding that planned outages in September had been slightly increased which should tighten the market.

* Injections into medium-range storage (MRS) have been reduced which should also pressure prices, according to gas analysts at Refinitiv.

* Wind generation is higher on Wednesday than it was on Tuesday which has reduced the gas-for-power demand forecast.

* Peak wind generation is forecast at 8.7 gigawatts (GW), climbing to 9.1 GW out of a total metred capacity of 12 GW.

* Gas for power demand is seen 11 mcm lower at 40 mcm.

* Day-ahead gas price at the Dutch TTF hub rose 0.14 euro to 10.07 euros per megawatt hour.

* The benchmark Dec-19 EU carbon contract was 0.1 euro higher at 26.35 euros a tonne.

Copyright Reuters, 2019

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