UK GAS-Most prices edge lower on expectation of milder cold spell
Most British wholesale gas prices edged lower on Thursday morning as a cold spell coming to the country on Friday is expected to be shorter and warmer than predicted earlier.
* The within-day contract dropped 0.45 pence to 41.25 p per therm by 0940 GMT.
* The December contract dipped 0.55 p to 41.65 p per therm.
* The day-ahead contract rose 0.45 p to 41.70 p per therm.
* Britain’s gas system was 6.2 million cubic metres (mcm) undersupplied, with demand forecast at 284.8 mcm and supply at 278.6, National Grid data showed.
* Temperatures on Friday are forecast to drop below the season’s norm, driving heating demand to around 216 mcm from 188 mcm on Thursday, Refinitiv data showed.
* Gas-for-power demand is also expected to rise on Friday due to cold weather and low wind generation.
* Wind production is expected to drop to 5.6 Gigawatts (GW) on Friday from almost 10 GW on Thursday, Elexon data showed.
* However, the cold spell is expected to be shorter and less cold than predicted earlier, which has reflected in bearish prices for most of the contracts on Thursday.
* Temperatures are forecast to rise above the season’s norm from Wednesday, with residential consumption revised down for the weekend and next week, Refinitiv analysts said in a morning report.
* On the supply side, flows from Norway edged up by 5 mcm to 99 mcm on Thursday, Gassco data showed.
* Flows from UK Continental Shelf stepped up by 3 mcm to 144 mcm/per day.
* Liquefied natural gas (LNG) sendout is expected to be 2 mcm lower than on Wednesday.
* However, an influx of LNG cargo arrivals in Britain continues, with two more tankers carrying cargoes from the United States signalling Britain on Thursday.
* Day-ahead gas at the Dutch TTF hub edged down 0.02 euro to 15.93 euros per megawatt hour (MWh), the December contract was 0.27 euro down to 15.88 euros/MWh.
* The benchmark Dec-19 EU carbon contract slipped 0.11 euro to 25.00 euros per tonne.
Source: Reuters (Reporting by Ekaterina Kravtsova; Editing by Shounak Dasgupta)