UK GAS-Prices rise on undersupply as temperatures dip

LONDON: British wholesale gas prices rose on Friday morning as dip in temperatures boosted demand and left the market undersupplied.

The day-ahead contract was up 2.45 pence at 42.75 p/therm by 1026 GMT.

Traders said lower forecast temperatures, combined with a dip in supply from the country's liquefied natural gas (LNG) terminals, had buoyed prices.

Average temperatures in Britain were forecast at 3.4 degrees Celsius on Friday, falling to 1.9C on Monday, Refinitiv Eikon data showed.

Analysts at Refinitiv forecast local distribution zone (LDZ) demand, which is primarily used for heating, at 243 million cubic metres (mcm) for Friday and 259 mcm for Monday, up 14 mcm and 15 mcm respectively from the previous forecasts.

Total supply from the country's LNG terminals was expected at 51 mcm on Friday, down 25 mcm from the previous day.

"LNG sendout has adjusted substantially lower today, however on Monday South Hook and Isle of Grain are expecting to receive cargoes, which may trigger higher send-out," analysts at Refinitiv said in a daily research note.

Britain's gas system was undersupplied with demand forecast at 312 million cubic metres (mcm) and supply forecast at 306.3 mcm/day, National Grid data showed.

The January contract was up 1.20 p at 42.40 p/therm.

The day-ahead gas price at the Dutch TTF hub rose 0.58 euros at 14.48 per megawatt hour.

The benchmark Dec-20 EU carbon contract was up 0.90 euro at 29.90 euros per tonne.