UK GAS-Prompt prices rise with wind power, temperatures set to dip

LONDON: Prompt British wholesale gas prices rose on Tuesday morning, with lower output from the country's wind farms and a forecast dip in temperatures boosting demand.

The within-day contract was up 1.00 pence at 9.50 p/ therm by 0849 GMT.

The day-ahead contract was up 1.00 p at 9.50 p/therm.

Traders said temperature forecasts had turned cooler for the rest of the week than previously expected.

Average temperatures in Britain were expected at 16.7 degrees Celsius on Tuesday falling to 14.5 degrees on Wednesday, Refinitiv Eikon data showed.

The forecasts were down 0.2 degrees and 2.4 degrees respectively on previous expectations.

"The hot weather which dominated over the UK should end soon, with temperatures in the UK forecast to drop well below seasonal normal already from Thursday," Refinitiv analysts said in a daily research note.

Peak wind power generation is forecast at 2.6 gigawatts (GW) on Tuesday, Elexon data showed.

Britain's gas system was slightly undersupplied, with demand forecast at 161.6 million cubic metres (mcm) and flows at 157 mcm/day, National Grid data showed.

Further out on the curve prices were mixed.

The July contract was up 0.17 p at 10.00 p/therm.

The Winter 2021 contract was down 0.16 p at 39.24 p/therm.

The day-ahead gas price at the Dutch TTF hub was up 0.30 euro at 3.90 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract was up 0.26 euro at 21.23 euros per tonne.