UK GAS-Prices rise on French power sector strike

LONDON: British wholesale gas prices rose on the back of reduced power generation in France due to a workers strike.

The day-ahead contract was 1.65 pence higher at 42.50 pence per therm by 0938 GMT.

Gas for January delivery rose by 1.8 pence to 44.20 pence per therm.

Strikes by workers protesting against a French nuclear reform plan reduced nuclear and hydro power generation on late Wednesday, data from power group EDF showed.

The disruption was around 3.6pc of available production capacity as of Wednesday evening, the data showed.

French nuclear output was still above levels observed in Dec. 2019, Refinitiv gas analysts said, when a nationwide strike in nuclear reactors and coal-fired power generators reduced electricity generation by 7pc.

France is a net power exporter in Europe, meaning there may be need for more gas across the continent to replace some of French power imports.

There were several gas outages ongoing in Norway, but the impact was not bullish, Refinitiv analysts said, as it was offset by an increase in liquefied natural gas send-out.

Other market drivers were bearish.

The UK gas system was more than 17 million cubic metres (mcm) oversupplied with demand forecast at 310.5 mcm and supply at around 328 mcm, national grid data showed.

Wind output remains strong, reducing the call for gas from power plants.

Peak wind generation is forecast at 13.1 gigawatts (GW) on Thursday and 13 GW on Friday, out of total metered capacity of around 18 GW, Elexon data showed.

Average temperature was expected to rise by 1 degree Celsius on Friday in western Europe, according to Refinitiv, lowering gas consumption in the region.

The January gas price at the Dutch TTF hub was up 0.49 euro at 15.27 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract was 0.40 euro higher at 30.10 euros a tonne.