UK GAS-Prices fall on increased UKCS flows, reduced gas-for-power demand

• The day-ahead contract was down by 1.00 pence at 9.00 pence per therm by 0746 GMT, while the June contract was 0.65 pence lower at 9.10 p/therm.
• UK domestic production was 6 million cubic metres (mcm) higher than the day before and gas-for-power demand was reduced due to low wind output.

LONDON: British wholesale gas prices fell on Wednesday morning as UK Continental Shelf (UKCS) production rose and gas-for-power demand fell.

The day-ahead contract was down by 1.00 pence at 9.00 pence per therm by 0746 GMT, while the June contract was 0.65 pence lower at 9.10 p/therm.

UK domestic production was 6 million cubic metres (mcm) higher than the day before and gas-for-power demand was reduced due to low wind output.

Peak wind generation is forecast at 1.4 gigawatts (GW) on Wednesday and 2.4 GW on Thursday, out of a total metered capacity of around 15 GW, Elexon data shows.

Temperatures are expected to remain above normal for the rest of May and early June.

Prices had rebounded from record lows on Tuesday as the Russian flows via the Yamal-Europe pipeline, which crosses Poland, halted.

Capacity auction results indicate flows will rise again in June, data from Poland's gas system operator showed.

Low liquefied natural gas send-out may bring some upside risk to the market, Refinitiv gas analysts said.

"LNG remains low with Isle of Grain being muted and almost zero send-out from Dragon as no cargoes are scheduled to arrive within our forecast horizon," they added.

The system was slightly undersupplied by 3 mcm, with demand forecast at 184 mcm and flows at 181 mcm/day, National Grid data shows.

The June gas price at the Dutch TTF hub was down 0.25 euro at 3.80 euros per megawatt hour.