UK GAS-Prompt prices inch higher on cooler weather forecasts, lower wind power

LONDON: Prompt British wholesale gas prices edged higher on Friday as expectations of cooler weather from Saturday and forecasts for lower output from the country's wind farms boosted demand.

The within-day contract was up 0.25 pence at 13.05 p/therm by 0919 GMT.

The day-ahead contract was up 0.35 p at 13.20 p/therm.

Traders said with supply and demand in the market balanced on Friday attention had turned to next week when demand is expected to rise as gas fired power plants produce more electricity to fill a gap left by lower wind output and temperatures are poised to fall.

Peak wind power generation is forecast at 9.3 gigawatts (GW) on Friday, falling to 5 GW on Saturday, Elexon data showed.

Temperatures are expected to average 21.4 degrees Celsius in Britain on Friday, Refinitiv Eikon data showed, some 3.9 degrees higher than previously forecast.

By Monday the average temperature is expected to drop to 15.4 degrees, some 5.9 degrees lower than previously forecast, the data showed.

"We expect the DA (day-ahead) market to be relatively tighter... as both LDZ (local distribution zone) and gas for power consumption are forecast higher by 7 million cubic metres a day (mcm/d) and 15 mcm/d, respectively," Refinitiv analysts said in a daily research note.

Britain's gas system was balanced on Friday with demand forecast at 134.6 mcm and flows at 134.4 mcm/day, National Grid data showed.

The August contract was up 0.20 p at 13.50p/therm.

The day-ahead gas price at the Dutch TTF hub was up 0.15 euro at 5.08 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract was up 0.81 at euro at 26.35 euros per tonne.