UK GAS Warming temperatures push British gas prices lower

The LNG (liquefied natural gas) arrival rate and current storages status ensure sendout will remain high. Aver
05 Dec, 2019
  • The LNG (liquefied natural gas) arrival rate and current storages status ensure sendout will remain high.
  • Average temperatures are forecast to rise to 10.5 degrees Celsius on Friday from 5.9 degrees on Thursday.
  • The day-ahead gas price at the Dutch TTF hub was down 0.36 euro at 14.52 euros per megawatt hour.

The within-day contract was down 2.85 pence at 33.15 p/therm by 0959 GMT.

The day-ahead contract was down 1.65 pence at 33.75 p/therm.

The UK gas system was 21.8 million cubic metres (mcm) oversupplied, with forecast demand below the seasonal norm at 288.1 mcm and supply at 309.9 mcm, National Grid data showed.

Local distribution zone (LDZ) demand, mainly for home heating, was forecast at 188 mcm on Friday, down 38 mcm from Thursday.

Average temperatures are forecast to rise to 10.5 degrees Celsius on Friday from 5.9 degrees on Thursday, according to Refinitiv Eikon data.

LNG sendout was strong at 136 mcm while flows from Norway and the UK Continental Shelf were down by around 20 mcm, Refinitiv Eikon data showed.

"The LNG (liquefied natural gas) arrival rate and current storages status ensure sendout will remain high," said Wayne Bryan, senior European energy & commodity analyst at Alfa Energy.

"With no cooler temperatures forecast for another 7 days the system will remain comfortable and forecast LDZ demand is also softer," he said.

Ten LNG tankers are expected at UK terminals between Dec. 7-15.

Wind generation expected to remain high at 12.7 Gigawatts (GW) on Thursday and 11.9 GW on Friday, Elexon data showed, reducing gas-for-power demand.

An unplanned outage at Barrow on the UK Continental Shelf is scheduled to end on Thursday, though planned maintenance will again cut capacity from Dec. 7-14.

Further out, the January gas contract fell 0.68 p to 40.35 p/therm, while the summer 2020 contract dropped 0.55 p to 35.80 p/therm.

The day-ahead gas price at the Dutch TTF hub was down 0.36 euro at 14.52 euros per megawatt hour.

The benchmark Dec-19 EU carbon contract was down 0.21 euro at 24.53 euros per tonne.

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