UK GAS-Day-ahead up on colder weather, lower wind forecasts

• The day-ahead contract was 0.50 pence higher at 22.15 pence per therm at 0914 GMT.
• Temperatures are expected to be at the seasonal norm today and then drop below normal until early April.
• Peak wind generation is forecast at 9.3 gigawatts (GW) on Wednesday, dropping to 2.8 GW on Thursday, Elexon data shows.

LONDON: British wholesale gas for day-ahead delivery was up on Wednesday morning on expectations of colder weather and lower wind output, while other contracts dipped slightly.

The day-ahead contract was 0.50 pence higher at 22.15 pence per therm at 0914 GMT.

"Consumption is up as temperatures dip. Wind is going to drop tomorrow as well," a trader said.

Temperatures are expected to be at the seasonal norm today and then drop below normal until early April.

Day-ahead local distribution zone consumption is 9 million cubic metres (mcm) higher than the previous day.

Peak wind generation is forecast at 9.3 gigawatts (GW) on Wednesday, dropping to 2.8 GW on Thursday, Elexon data shows.

Low wind output typically raises demand from gas-to-power plants.

The market was undersupplied by around 11 million cubic metres (mcm), with demand forecast at 244 mcm and flows at 233 mcm/day, National Grid data shows.

The weekend contract was 0.25 pence lower at 22.00 p/therm.

The April contract dipped by 0.03 pence to 21.37 p/therm.

In the Dutch gas market, the day-ahead gas price at the TTF hub was down 0.22 euro at 9.93 euros per megawatt hour.

European power and gas prices have sunk to new lows this week as lockdowns due to coronavirus dent energy demand, though signs of a recovery in liquefied natural gas (LNG) buying in Asia could lend support.

The benchmark Dec-20 EU carbon contract was 0.52 euro higher at 17.30 euros a tonne.

Britain will hold an auction of EU carbon permits for the aviation sector this afternoon on ICE this afternoon.