UK GAS-Prompt prices fall on weak demand, oversupply

Peak wind generation is forecast to remain above normal levels at around 11.3 gigawatts (GW) both on Monday and Tue
23 Mar, 2020
  • Peak wind generation is forecast to remain above normal levels at around 11.3 gigawatts (GW) both on Monday and Tuesday.
  • The system was heavily oversupplied by 30 million cubic metres (mcm), with demand forecast at 243.6 mcm and flows at 273.5 mcm/day, according to National Grid data.

Gas for immediate delivery fell by 2.25 pence to 21.50 pence per them by 0948 GMT.

The day-ahead contract was down 1.20 pence at 22.00 p/therm.

The system was heavily oversupplied by 30 million cubic metres (mcm), with demand forecast at 243.6 mcm and flows at 273.5 mcm/day, according to National Grid data.

While pipeline gas flows from UK and Norway, as well as from UK's LNG terminals were lower than on Friday, demand fell by more, analysts at Refinitiv said in a daily research note.

"UK physical system opened massively oversupplied today due to lower consumption," they added.

Average temperatures in Britain were forecasts at 7 degrees Celsius for Tuesday, up 2.8 degrees on the previous forecast.

Peak wind generation is forecast to remain above normal levels at around 11.3 gigawatts (GW) both on Monday and Tuesday, Elexon data shows.

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

Brent crude prices continued to fall on Monday due to concerns about the demand as coronavirus outbreak threatened to cause a worldwide economic contraction.

In the Dutch gas market, the day-ahead contract on the TTF hub was down by 0.77 euro at 7.98 euros per megawatt hour (MWh), while Dutch gas for April delivery was down by 0.47 euro to 7.97 euros per MWh.

The benchmark Dec-20 EU carbon contract was down 1.31 euro at 14.80 euros a tonne.

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