UK GAS-Prices fall amid slightly oversupplied market, lower demand

LONDON: British wholesale gas prices fell on Friday morning amid a slightly oversupplied market and lower demand.

The day-ahead contract was 0.60 pence lower at 31.50 pence per therm at 0736 GMT.

The within-day contract was 0.40 pence lower at 31.50 p/therm.

The system was 5 million cubic metres (mcm) over-supplied, with demand forecast at 174 mcm and supply at 179 mcm/day, National Grid data showed.

Gas-for-power demand is down 19 mcm from the previous day but is forecast to be 30 mcm higher for the day-ahead as wind power generation drops below the seasonal norm at the beginning of next week, Refinitiv gas analysts said.

Peak wind generation is forecast at 12.6 gigawatts (GW) on Friday and 12.2 GW the next day, out of total metered capacity of 18 GW, Elexon data showed.

Day-ahead local distribution zone consumption is 16 mcm lower.

On the supply side, Norwegian flows to the UK are at 41 mcm/d, 10 mcm down from yesterday, with several outages ongoing.

Total liquefied natural gas send-out is nominated at 28 mcm, 7 mcm down from yesterday.

UK October contract was down 0.40 pence at 30.90 p/therm.

The October gas price at the Dutch TTF hub fell by 0.28 euro to 11.49 euros per megawatt hour.

"Weak injections will put pressure on the power sector to absorb incremental supply and are bearish for TTF Oct-20. A lot of spare storage space is unavailable to the market owing to contractual or physical congestion," analysts at consultancy Energy Aspects said.