UK GAS-Prices fall on more supply, high winds

• Gas-for-power demand is low at 40 mcm compared to levels of between 50 and 60 mcm last week.
• Peak wind generation is expected to be over maximum metred capacity at 12.22 gigawatts (GW) compared to 12.05 capacity.

LONDON: British wholesale gas prices tumbled on Wednesday despite chillier weather boosting heating demand as supplies increased from the North Sea and high wind generation dampened gas-for-power demand.

Day-ahead gas fell 1.3 pence to 24.00 pence per therm by 0740 GMT.

Within-day gas fell 1.65 pence to 24.00 p/therm.

The system was a bit oversupplied with demand forecast at 179.1 million cubic metres (mcm) and supplies seen at 184.2 mcm, National Grid data showed.

Temperature forecasts were reduced for Wednesday by 1.7 degrees Celsius to 10.9 degrees, prompting a 13 mcm increase in residential gas demand to 124 mcm.

Still, the gas system was being pushed into oversupply.

Gas-for-power demand is low at 40 mcm compared to levels of between 50 and 60 mcm last week.

Peak wind generation is expected to be over maximum metred capacity at 12.22 gigawatts (GW) compared to 12.05 capacity.

Strong wind generation tends to reduce demand for gas used in power generation.

Norwegian gas flows were around the same level on Wednesday as the previous day at 28 mcm, although much lower than Monday's 44 mcm.

But overall flows from the UK Continental Shelf were 7 mcm higher on Wednesday.

Send-out of gas from liquefied natural gas (LNG) terminals is expected to be stable at about 55 mcm with a steady flow of LNG tankers due at British terminals.

The November gas contract fell 0.9 pence to 41.20 p/therm.

Day-ahead gas at the Dutch TTF hub fell 0.45 euro to 9.00 euros per megawatt hour (MWh)

The Dutch month-ahead gas contract, a benchmark for LNG prices as well as European gas, was down 0.4 euro at 15.30 euros/MWh.

The benchmark Dec-19 EU carbon contract fell 0.39 euro to 22.14 euros a tonne.