UK GAS-Prices rise on higher consumption, despite oversupply

LONDON: British wholesale gas prices rose on Monday morning on higher consumption forecasts, despite heavy oversupply as Norwegian exports resumed after a worker strike ended.

Gas for day-ahead rose by 1.20 pence to 42.50 pence per therm by 0957 GMT.

The December price was up 0.70 pence at 42.50 p/therm and the January price was up 0.63 pence at 43.15 p/therm.

UK day-ahead local distribution zone consumption is forecast 14 mcm higher than the previous forecast, while consumption next week is 24 mcm higher, Refinitiv Eikon data showed.

Gas-for-power for Tuesday is forecast at 69 mcm, 5 mcm higher than the previous forecast.

Peak wind generation is forecast at around 11 gigawatts (GW) on Monday, falling to 7.8 GW on Tuesday, according to Elexon data.

Lower wind output typically increases demand from power plants.

"The contract rollover to December tomorrow may also provide support to prices today," Refinitiv gas analysts said.

However, the system is heavily over-supplied by 43 million cubic metres (mcm), with demand forecast at around 270 mcm and supply at 313 mcm/day, National Grid data showed.

Norway's Nyhamna gas export terminal has restarted production and is ramping up output following a shutdown triggered by a strike among workers, system operator Gassco said on Sunday.

Total Norwegian exports are at 343 mcm, up by 12mcm, mainly to continental Europe, flows data showed.

Exports to Britain are at 119 mcm.

Some UK Continental Shelf outages also ended at the weekend, boosting supply.

The December price at the Dutch TTF hub rose by 0.33 euro to 14.85 euros per megawatt hour.

The benchmark Dec. 20 EU carbon contract was 0.79 euro higher at 28.92 euros a tonne.