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UK GAS-Day-ahead up on expectations of gas re-routing to Europe

The British wholesale gas price for day-ahead delivery rose on Thursday as flows were expected to be re-routed to the continent tomorrow and amid low wind output.

The day-ahead contract TRGBNBPD1 rose by 0.95 pence to 68.95 pence per therm by 0836 GMT.

“The important driver on the bullish side is the expectation for rerouting of Langeled flows back to the Continent when Dunkirk maintenance fully ends tomorrow,” said Marina Tsygankova, gas analyst at Refinitiv.

The Dunkirk terminal outage in France is expected to end on Friday, with more gas routed back to the continent.

For now, however, Norwegian gas supplies through the Langeled pipeline rose to 43 million cubic metres (mcm) from 12 mcm/day on Wednesday.

Wind output is also low today but expected to rise tomorrow.

Low wind output typically increases demand for gas from power plants.

Peak wind generation is forecast at 3.7 gigawatts (GW) on Thursday, rising to 6.7 GW on Friday, out of total metered capacity of around 18 GW, Elexon data showed.

The July contract TRGBNBPMN1 inched down by 0.35 pence to 68.40 p/therm.

The system was slightly over-supplied, with demand forecast at 139.5 mcm and supply at 142.5 mcm/day, National Grid data showed.

Supplies from Dragon liquefied natural gas terminal have restarted after the end of maintenance, with flows rising to around 16 mcm/day from zero previously.

Flows through the Barrow (North Terminal) have also restarted, albeit at low levels, while production capacity was reduced due to an unplanned outage at Cygnus.

The Dutch July contract at the TTF hub TRNLTTFMc1 was down 0.22 euro at 27.83 euros per megawatt hour.

The benchmark Dec-21 EU carbon contract CFI2Zc1 was down 0.48 euros at 51.86 euros a tonne.

The UK Dec-21 carbon contract UKAFMc1 was 0.60 pounds lower at 43.50 pounds per tonne.

Britain’s emissions trading system includes a cost containment mechanism (CCM), updated monthly and to prevent price spikes which could release more supply to the market if prices are deemed too high.

Britain late on Wednesday said for the CCM to be triggered in August the benchmark contract would need to remain on average above 44.74 pounds within the whole of May, June and July.
Source: Reuters (Reporting by Nerijus Adomaitis in Oslo, editing by Nina Chestney)

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