UK GAS-Prices down on milder weather forecasts

24 Jan, 2019

Day-ahead gas price fell 2.25 pence to 57.25 pence per therm by 0845 GMT

Within-day gas price was yet to trade

The gas system was 12.6 million cubic metres (mcm) oversupplied, with demand forecast at 367.7 and supply seen at 380.3 mcm, according to National Grid data

Average temperatures in Britain are forecast at 1.0 degrees Celsius on Thursday, a rise of 0.9 degrees

But for Friday, the forecast has been increased by 4.9 degrees Celsius to 5.9 degrees on average, according to Refinitiv Eikon weather data

The higher temperature for Friday has led to a 42 mcm reduction in local gas demand expectation to 224 mcm from 268 mcm on Thursday

Gas for power, at 93 mcm on Thursday, is expected to fall to 71 mcm the following day as peak wind generation is seen jumping to 9.2 gigawatts (GW) from 2.7 GW on Thursday

Wind power tends to reduce demand for gas used in power stations

Gas supplies from Norway, Britain's offshore and along the BBL pipeline from the continent remained steady from Wednesday

There are two outages that continue to impact flows from UK production

A compressor issue at the Bacton SEAL terminal, on the east coast of England, is expected to be resolved later on Thursday or early Friday, a REMIT notice said

LNG send-out is expected to fall 16 mcm to 54 mcm although this level is still high compared to most of last year and two tankers are expected to dock by Monday

Prices fell further along the curve with the February contract down 1.45 pence to 58.45 p/therm

The day-ahead gas price at the Dutch TTF hub fell 0.35 euro at 21.60 euros per megawatt hour

Benchmark Dec-19 EU carbon contract was down 0.42 euro to 24.30 euros per tonne.

Copyright Reuters, 2019

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