UK GAS-Prices drop on system oversupply and strong wind
- The UK gas system was 15.2 million cubic metres (mcm) oversupplied, with demand forecast at 155 mcm and supply at 170.2 mcm, National Grid data showed.
- Peak wind power generation was expected to almost double on Friday, rising to 12.5 gigawatts (GW)
LONDON: British wholesale gas prices dropped on Thursday morning, pressured by oversupply and rising wind power generation.
The day-ahead contract dropped by 1.05 pence to 11.20 pence per therm by 0858 GMT.
The within-day contract fell by 0.25p to 12p per therm.
The UK gas system was 15.2 million cubic metres (mcm) oversupplied, with demand forecast at 155 mcm and supply at 170.2 mcm, National Grid data showed.
Higher UK Continental Shelf flows and softer demand from the power sector were the reasons for the oversupply, Refintiv analysts said in a morning note.
Peak wind power generation was expected to almost double on Friday, rising to 12.5 gigawatts (GW) from 6.6 GW on Thursday, Elexon data showed.
As a result, gas-for-power demand is expected to drop to 17 mcm on Friday from 41 mcm on Thursday, Refintiv data showed.
On the continent, flows form Norway increased, adding to oversupply in Europe.
"I think prices on the prompt found some resistance yesterday, which has made Norway ramp flows to the continent," one gas trader said.
Traders are also concerned whether liquefied natural gas (LNG) sendout could pick up in continental Europe this month.
In Britain, Qatari cargoes keep arriving, with one more vessel confirmed for this month. A total of seven Qatari tankers are expected in Britain between June 5 and June 17.
The UK month-ahead price fell by 0.4p to 11.70p per therm.
The day-ahead gas price at the Dutch TTF hub was down 0.40 euros at 4.50 euros per megawatt hour.
The benchmark Dec-20 EU carbon contract was 0.19 euros lower at 21.89 euros a tonne.
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