Prices fall on strong LNG send-out

02 Apr, 2019

* Day-ahead gas fell by 0.60 pence to 33.00 pence per therm by 0915 GMT.

* The within-day contract was yet to trade.

* UK gas system was 20 million cubic metres (mcm) oversupplied, with demand forecast at 293.7 mcm and supply at 313.7 mcm, National Grid data showed.

* The oversupply was largely due to a rise in LNG send-out to 80 mcm on Tuesday from around 64 mcm on Monday, Refinitiv analysts said.

* At least six LNG cargoes are expected to be delivered to UK terminals by April 20.

* UK Dragon terminal's send-out increased to 14 mcm/day indicating there is also a vessel on its way to the terminal, Refintiv analysts said.

* Average UK daily temperatures were predicted to drop sharply on Wednesday, with the forecast revised to be 2.3 degrees Celsius lower than previously expected, Refintiv weather data showed.

* However, strong supply offset the impact of higher demand expectations on gas prices.

* Wind generation was forecast at 3.7 gigawatts on Tuesday but was expected to double on Wednesday, Elexon data showed. The total capacity of the country's turbines is 12.1 GW.

* An increase in wind generation was another bearish factor for day-ahead prices.

* Weekend temperatures were forecast to be 0.8 C warmer than previously expected.

* April 1 marked the start of the summer gas season, where there is typically lower demand for heating and more injections into storage when prices are lower.

* Storage withdrawals were nominated high at 38mcm on Tuesday, however, which is also a bearish factor for prices.

* The combination of strong LNG and storage flows offset exports via the interconnector pipeline to Belgium, that were expected at 28 mcm.

* The May contract fell 0.55 pence to 32.70 p/therm.

* The Dutch TTF Day-ahead was down 0.20 euros per megawatt hour (MWh)at 13.90 euro/MWh.

* The benchmark Dec 19 EU carbon contract was down by 0.54 euros to 21.37 euros per tonne.

* UK baseload power for day-ahead delivery dropped by 2 pounds per megawatt to 40.30 pounds/MW.

Copyright Reuters, 2019

Read Comments