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UK GAS-Prices decline as domestic flows are expected to increase

British wholesale gas prices declined on Friday morning as flows from the UK Continental Shelf are expected to increase.

The day-ahead contract was flat at 90.00 pence per therm while the within-day contract was down 0.15 pence at 90.50 p/therm by 0918 GMT.

The weekend contract slipped by 0.10 pence to 89.90 p/therm.

UK Continental Shelf flows should increase today as an outage at Barrow North terminal ended but outages at Bacton SEAL and the Cygnus field are not scheduled to end until the weekend and Monday.

UKCS production should return to around 79 million cubic metres (mcm) next week, Refinitiv gas analysts said.

The gas system was 6 mcm over-supplied, with demand forecast at 125 mcm and supply at 131 mcm/day, National Grid data showed.

UK wind power generation is forecast to remain below the seasonal norm in the first half of the next week before rising to above normal.

Russian gas flows through the Nord Stream pipeline have also resumed after a 10-day maintenance outage.

Nord Stream 2 is likely to start up this year but there is still uncertainty about exactly when, analysts at Energy Aspects said.

Potential Nord Stream 2 permitting delays could restrict flows in the fourth quarter but the second line of the pipeine should start deliveries in December, they added.

German Chancellor Angela Merkel on Thursday defended a deal with the United States that allows the Nord Stream 2 gas pipeline to proceed as a pragmatic compromise, but Ukraine said the agreement was too weak to ensure Russia behaves the way Kyiv and the West want.

“Some of the biggest risks for Dutch TTF gas will relate to the weather and the volume of LNG that gets delivered to Europe, but we still see risks around Russian deliveries this winter,” Energy Aspects said.

The August price at the Dutch TTF hub was up by 0.27 euro to 35.72 euros per megawatt hour.

The benchmark Dec-21 EU carbon contract was down 0.48 euro at 50.31 euros per tonne.

The benchmark Dec-21 British carbon contract was down 0.41 pounds at 42.49 pounds per tonne.
Source: Reuters (Reporting by Nina Chestney)

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