UK GAS-Prices slump on oversupply, higher Norwegian imports

Prompt British wholesale gas prices fell on Wednesday morning as a ramp up in imports from Norway left the system oversupplied.

The day-ahead contract was down 2.10 pence at 33.50 p/therm by 0827 GMT.

Traders said higher imports from Norway, as fears over significant strike disruption subsided, coupled with strong output from the country's wind farms led to oversupply, pushing prices lower.

Britain's gas system was oversupplied by 17 million cubic metres (mcm) with demand forecast at 180.5 mcm and flows at 197.5 mcm/day, National Grid data showed.

Peak wind power generation is forecast at 10.6 gigawatts (GW) on Wednesday, falling to 7.7 GW on Thursday, National Grid data showed.

"UK wind power generation is expected to drop below seasonal normal tomorrow, afterwards recovering to above normal for the rest of the week," analysts at Refinitiv said in a daily research note.

Imports from Norway though the Langeled pipeline were expected at 72 mcm/day, up 21 mcm on the previous day, Refinitiv Eikon data showed.

Norway's Equinor said it would continue production at its Johan Sverdrup oil field despite some union members voting to strike.

Further out on the curve prices also fell with the new gas year set to start on Thursday.

The October contract was down 1.80 p at 33.50 p/therm.

The Winter 2020 contract was down 0.99 pence at 39.01 p/therm.

The day-ahead gas price at the Dutch TTF hub was down 0.65 euro at 11.90 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract slipped 0.04 euro to 26.75 euros per tonne.