UK GAS Prompt falls due to milder weather; strong wind power, LNG feed demand

Gas for within-day delivery was 0.25 pence lower at 39.50 pence/therm. Strong power generation from wind turbi
20 Nov, 2019
  • Gas for within-day delivery was 0.25 pence lower at 39.50 pence/therm.
  • Strong power generation from wind turbines typically reduces demand for electricity produced in gas-fired plants.
  • The Dutch month-ahead gas contract, a benchmark for LNG prices as well as European gas.

Day-ahead gas fell by 0.45 pence to 39.00 pence per therm by 0945 GMT.

Gas for within-day delivery was 0.25 pence lower at 39.50 pence/therm.

Milder weather than previously expected, strong wind power generation and expected LNG arrivals led prompt prices lower, despite the system's supply deficit, traders said.

Average daily temperatures are forecast at 5.6 degrees Celsius on Wednesday and are expected to rise to 7.5 C during the weekend, Refinitiv Eikon data showed.

Wind power generation is forecast to reach 10.2 gigawatts (GW) on Wednesday and 10.0 GW the next day, Elexon data showed. The system's maximum production capacity is 12.1 GW.

Strong power generation from wind turbines typically reduces demand for electricity produced in gas-fired plants.

Five LNG cargos are expected to arrive in Britain this month, with three more vessels set for December.

The British gas system was undersupplied by around 11.7 million cubic metres (mcm), with demand forecast at 326.5 mcm and supply at 314.8 mcm/day, National Grid data shows.

Norwegian gas flows rose slightly to 82 mcm per day from 81 mcm on Tuesday, with flows through the Langeled pipeline increasing to 71 mcm/day.

The December gas contract was up 0.05 pence at 40.05 pence/therm.

Day-ahead gas at the Dutch TTF hub fell by 0.32 euro to 14.88 euros per megawatt hour (MWh).

The Dutch month-ahead gas contract, a benchmark for LNG prices as well as European gas, was down 0.10 euro at 15.25 euros/MWh.

The benchmark Dec-19 EU carbon contract fell by 0.15 euro to 23.29 euros a tonne.

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