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Markets

Prices up on arrival of delayed cold weather

Published January 8, 2019 Updated January 8, 2019 10:56am

British wholesale gas prices rose on Tuesday on the arrival of colder weather, which was initially expected from Monday and caused prices to fall on the previous day's missed forecasts.

* Within-day gas was up 1.75 pence at 58.00 p/therm.

* Day-ahead gas was up 2.70 pence at 59.00 pence per therm at 0945 GMT

* Expected cold weather that arrived with a day's delay was behind the rise in prices, which fell sharply yesterday when the day proved to be warmer than forecasts had showed, a British gas trader said.

* "Yesterday after the weekend we saw a delay in the cold arrival and markets tanked... Today we see a confirmation of the cold, as expected by the market," he said.

* Average daily temperatures in Britain are expected to be 6.9 degrees Celsius on Tuesday and to fall to 3.7 C on Wednesday.

* The system was oversupplied with demand in Britain forecast at 286.3 million cubic metres (mcm) per day and flows at 296.5 mcm/day, National Grid data showed.

* Norwegian gas flows to Britain stood at 106 mcm/day from 111 mcm/day on Monday.

* Britain expects four liquefied natural gas tankers until the end of the week.

* Prices rose despite strong power output from wind turbines, which otherwise decreases demand for electricity generated in gas-fired power stations.

* On Tuesday peak wind generation was forecast at 11 gigawatts (GW) out of a total capacity of more than 12 GW. It is expected to fall however to 6.5 GW on Wednesday.

* February contract rose 2.05 pence to 61.00 p/therm.

* Day-ahead Dutch gas at the TTF hub rose by 0.98 euro to 21.63 euros per megawatt hour.

* The benchmark Dec-19 EU carbon contract rose by 0.57 euro to 22.82 euros per tonne.

Copyright Reuters, 2019

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