UK GAS-Prompt prices mixed on oversupply, cooler temperature forecasts

LONDON: Prompt wholesale British gas prices were mixed early on Wednesday, as oversupply pushed the within-day contract lower and the day-ahead was boosted by cooler temperature forecasts.

Within-day gas price was down 0.45 pence at 42.00 p/therm, by 0913 GMT.

The day-ahead contract was up 0.50 p at 42.50 p/therm.

Traders said although the system was oversupplied on Wednesday morning there were signals of an uptick in demand from Thursday with temperatures poised to drop, boosting demand for gas for heating.

Average temperatures in Britain were forecast at 5.2 degrees Celsius on Wednesday, falling to 3.9C on Thursday and dropping to 2.6C degrees by the weekend, Refinitiv Eikon data showed.

Analysts at Refinitiv forecast local distribution zone (LDZ) demand, which is primarily used for heating, at 236 million cubic metres (mcm) for Thursday, up 11 mcm from the previous forecast.

"The main driver for the day-ahead (DA) is the total DA consumption being up," analysts at Refinitiv said in a daily research note.

Britain's gas system was oversupplied with demand forecast at 311.8 mcm and supply seen at 326.3 mcm/day on Wednesday, National Grid data showed.

Further out on the curve prices edged lower.

The January contract was down 0.65 pence at 42.45 p/therm.

The day-ahead gas price at the Dutch TTF hub was down 0.22 euros at 14.60 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract was down 0.14 euro at 28.72 euros a tonne.