LONDON: British wholesale gas prices fell on Wednesday, retracing gains of the previous session which had been driven by short covering, despite an undersupplied system as outages in Norway continue.
* The within-day contract fell 0.3 pence to 31.70 pence per therm by 0810 GMT.
* Day-ahead gas prices were 0.15 pence lower at 31.25 pence per therm.
* Both contracts had spiked over 5% on Tuesday morning and early afternoon but began falling towards the end of the day.
* "The short-covering was over. There was no reason prices were up," said one gas trader. "We're not all done yet, we should come off some more."
* Flows to Britain along the Langeled pipeline were 14 mcm lower as a number of outages continued there including on the Nyhamma, Troll and Karsto fields.
* However, Norwegian operator GASSCO said over the weekend the impact from the Nyhamma outage, which will last through August, would be half of the initial estimate.
* That revived concerns that storage tanks would get too full, too quickly during a season of low demand.
* "As long as it looks (like) tank tops, I think people will want to be invested short," said another gas market player.
* Gas send-out from liquefied natural gas (LNG) terminals is lower on Wednesday, at 16 mcm compared to 23 the previous day.
* But an additional tanker declared for Britain, with three tankers now expected in the next two weeks.
* Peak wind generation is expected to be low at 1.7 gigawatts (GW) on Wednesday out of 12 GW of metered capacity, Elexon data showed.
* Low wind generation can increase demand for gas used in power generation. Gas for power demand is seen 5 mcm higher on Thursday at 72 mcm.
* The system was undersupplied by 10 million cubic metres (mcm) with demand forecast at 162.8 mcm and supplies seen at 152.8 mcm.
* Further along the curve, the August contract was up 0.55 pence at 30.50 p/therm
* The September price fell 1.59 pence to 33.10 p/therm, narrowing the spread between the two months.
* In the Dutch gas market, the day-ahead gas price at the TTF hub fell 0.12 euro to 11.43 euros per megawatt hour.
* The benchmark Dec-19 EU carbon contracts was 0.17 euro higher at 26.73 euros a tonne.
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