Prices rise on low wind output, outages
British wholesale gas prices rose on Wednesday as outages at facilities on the UK continental shelf (UKCS) reduced flows and wind power output remained very low.
The day-ahead contract TRGBNBPD1 was up 1.1 pence at 90 p/therm by 0855 GMT.
Gas for immediate delivery TRGBNBPWKD was 0.25 pence higher at 88.50 p/therm.
“Domestic UK Continental Shelf production remains curbed by extended outages at Bacton SEAL and Cygnus field that are now expected to end by the weekend. This morning an unplanned maintenance at Barrow North continued cutting the live flows at the terminal,” analysts at Refinitiv said in a daily research note.
Peak wind generation is forecast at 1 gigawatt (GW) on Wednesday and 1.1 GW on Thursday, out of total metered capacity of around 20 GW, Elexon data showed.
Low wind output typically increases demand for gas from power plants.
The August British gas contract TRGBNBPMQ1 rose by 0.45 p to 88.20 p/therm.
However, Britain’s gas system was over-supplied by 10.3 mcm, with demand forecast at 128.5 mcm, more than 30 mcm below the seasonal norm, National Grid data showed.
A heatwave in Britain is expected to last until the weekend.
An agreement between the United States and Germany over the Nord Stream 2 gas pipeline from Russia is expected on Wednesday, sources said, easing concerns over long term supply to Europe.
“The construction of the pipeline could be completed in September. This may prevent possible gas shortages during the upcoming winter season,” said ABN Amro senior energy economist Hans van Cleef.
“European gas prices are still very high. In the short term, there does not seem to be much downward pressure to be expected on prices either. The demand for gas remains strong and the inventory build-up is slow,” he added.
The month-ahead price at the Dutch TTF hub TRNLTTFMc1 was 0.50 euro higher at 35.80 euros per megawatt hour.
The benchmark Dec-21 EU carbon contract CFI2Zc1 was up 0.54 euro at 51.75 euros per tonne.
The benchmark Dec-21 British carbon contract UKAFMc1 was 0.50 pounds higher at 43.50 pounds per tonne.
Source: Reuters (Reporting by Peter Hobson; editing by Nina Chestney)