UK GAS Prices mostly decline on high wind output

• The day-ahead contract was 0.17 pence lower at 22.03 pence per therm by 0913 GMT.
• Gas for immediate delivery rose by 0.25 pence to 22.35 p/therm.
• The day-ahead gas price at the Dutch TTF hub  was 0.15 euro lower at 8.73 euros per megawatt hour.

LONDON: British wholesale gas prices were mostly lower on Tuesday morning due to continued strong wind output and forecasts for slightly milder weather.

The day-ahead contract was 0.17 pence lower at 22.03 pence per therm by 0913 GMT.

The March contract inched down by 0.05 pence to 20.70 p/therm.

Wind power output will remain strong for the next two days with peak generation forecast at 13.3 gigawatts (GW) on Tuesday and 13.8 GW on Wednesday, Elexon data shows.

Wind speeds are expected to fall after that but then increase sharply again at the end of the week - remaining well above normal until late February, Refinitiv gas analysts said.

Strong wind output typically reduces demand from gas-to-power plants.

In addition, temperatures are expected to rise to above the seasonal norm in the second half of the week. Milder weather typically reduces demand for heating.

Consumption is expected to remain below the seasonal norm until the middle of March and return to above normal in the second half of the month, Refinitiv analysts said.

Gas for immediate delivery rose by 0.25 pence to 22.35 p/therm.

Traders said undersupply helped to lift the within-day and also high winds had delayed the arrival of some liquefied natural gas (LNG) tankers.

Demand is forecast at nearly 302 million cubic metres (mcm) and flows at 283 mcm/day, National Grid data shows, meaning the system is undersupplied by 19 mcm.

The day-ahead gas price at the Dutch TTF hub  was 0.15 euro lower at 8.73 euros per megawatt hour.

The benchmark Dec-20 EU carbon contract edged up by 0.07 euro to 23.23 euros a tonne.