UK GAS-Prices rise on cooler weather, volatile wind

British wholesale gas prices rose on Monday morning, despite an over-supplied system, with cooler weather and volatile wind forecasts supporting contracts.

The day-ahead contract rose by 0.45 pence to 40.75 pence per therm by 0830 GMT.

The November contract was 0.75 pence higher at 41.50 pence per therm.

"This week is bit bearish," one trader said, highlighting currently milder weather.

However, temperatures are forecast to fall again from next week and wind power will be up and down, supporting prices on the curve, he added.

Local distribution zone (LDZ) demand for Tuesday was forecast at 124 million cubic metres (mcm), down 10 mcm from a previous forecast, and gas-for-power demand was down 9 mcm at 38 mcm/day, analysts at Refinitiv said.

With the return of colder weather next week, LDZ consumption should rise to 155 mcm/day.

The UK system was forecast 9.2 mcm long, down from initial over-supply of 12 mcm, National Grid data showed.

Norwegian production rose following the end of maintenance at Kvitebjoern and Oseberg, but lifted flows to Europe mostly, while flows to Britain were down 4 mcm to 93 mcm/day.

There should be a strong increase in storage injections for the day-ahead, Refinitiv analysts said.

Peak wind generation is expected to be 11.5 gigawatts (GW) on Monday and 11.1 GW on Tuesday, out of total metered capacity of 18 GW, Elexon data shows.

But after that, British wind power output is set to see daily swings of up to 5.5 GW, Refinitiv data showed.

In the Dutch gas market, the November gas price at the TTF hub was up 0.30 euro at 14.75 euros per megawatt hour - a fresh 10-month high.

The benchmark Dec-20 EU carbon contract fell by 0.20 euro to 24.69 euros a tonne.