UK GAS-Prices fall on higher LNG send-out, Norwegian flows

Gas for immediate delivery fell by 2.00 pence to 23.00 pence per them by 0853 GMT. The system was oversupplied
20 Mar, 2020
  • Gas for immediate delivery fell by 2.00 pence to 23.00 pence per them by 0853 GMT.
  • The system was oversupplied by 34 million cubic metres (mcm), with demand forecast at 282 mcm and flows at 316 mcm/day, according to National Grid data.

Gas for immediate delivery fell by 2.00 pence to 23.00 pence per them by 0853 GMT.

The day-ahead contract was down 0.60 pence at 24.00 p/therm.

The system was oversupplied by 34 million cubic metres (mcm), with demand forecast at 282 mcm and flows at 316 mcm/day, according to National Grid data.

Send-out of LNG is 8 mcm higher than the previous day and Norwegian flows to Britain are also up.

On the demand side, temperatures are expected to remain below normal until the end of March, which will likely increase demand for heating.

Wind power generation is forecast to be above normal over the weekend and drop below normal by the middle of next week, Refinitiv Eikon data shows.

Peak wind generation is forcecast at 8.1 gigawatts (GW) on Friday but rising to 12 GW on Saturday, Elexon data shows.

Higher wind output typically reduced demand from gas-to-power plants.

European gas demand could fall more than 4pc over the next two months as commercial and industrial activity is depressed as more countries lock down to tackle the spread of the novel coronavirus, consultancy Rystad Energy said on Thursday.

In the Dutch gas market, the April contract on the TTF hub was down by 0.21 euro at 8.36 euros per megawatt hour.

Dutch gas prices will have to drop for the market to balance this summer amid already bearish sentiment concerning the spread of COVID-19, said consultancy Energy Aspects.

"Weak demand in an already weak gas market raises the risk that TTF prices will need to drop to levels that discourage supply earlier than previously expected," they said.

"The high variable cost of Russian supply into Poland via Yamal means this should be one of the first sources to turn down this summer, providing a level of support for TTF prices," they added.

The benchmark Dec-20 EU carbon contract was flat at 16.39 euros a tonne.

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