UK GAS-Prompt prices rise on higher gas-for-power demand

LONDON: Prompt British wholesale gas prices rose on Thursday morning, supported by higher gas demand for power generation amid weak wind production.

The day-ahead contract was up 0.80 pence at 17.00 pence per therm by 0900 GMT.

The weekend contract was 2.00 p up at 16.50 p per therm.

Gas demand for power generation was expected to rise to 52 mcm on Thursday from 36 mcm on Wednesday, 14 mcm higher than previously forecast, Refinitiv data showed.

The rise in gas-for-power demand is taking place amid low wind production.

Peak wind generation is predicted at 4.5 gigawatts (GW) on Thursday and 4.4 GW on Friday out of 18 GW capacity, Elexon data showed.

Temperatures are forecast to surge in some parts of Britain on Friday, potentially creating cooling demand.

The UK gas system was 6.1 mcm oversupplied on Thursday, with demand forecast at 149.5 mcm and supply at 155.6 mcm, National Grid data showed.

Prices across Europe are also rising this week on the back of lower Russian flows via the Velke Kapusany border point and a jump on the Henry Hub in the United States, where liquefied natural gas (LNG) companies boosted their exports.

On the curve, the December contract rose by 0.25 p to 36.00 p/therm.

The day-ahead gas price at the Dutch TTF hub was up 0.32 euros at 7.00 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract was up 0.43 euros at 27.20 euros per tonne.

The Brent crude oil benchmark eased on Thursday after rising to its highest since March 6 in the previous session.