UK GAS-Prices decline in well-supplied market

British wholesale gas prices edged lower on Thursday in a well-supplied market boosted by storage withdrawals and the prospect of more liquefied natural gas (LNG) deliveries.

* Day-ahead gas price fell 0.45 pence to 53.90 pence per therm by 0830 GMT.

* Within-day gas price was yet to trade.

* Gas demand was forecast at 391 million cubic metres (mcm), 100 mcm above the seasonal norm as swathes of the country suffer freezing temperatures, National Grid data showed.

* Nevertheless, supply is seen at more than 10 mcm above demand at 402 mcm, helped by 52 mcm of withdrawals from gas storage as well as robust supplies from the North Sea in the absence of major outages.

* “We expect heavy (storage) withdrawals today due to peak consumption expected today amid the current cold spell,” gas analysts at Refinitiv wrote in a daily note.

* “Withdrawals are expected to remain strong through to the beginning of next week when temperatures are expected slightly closer to normal.”

* Average daily temperatures in Britain are forecast at -1.1 degrees Celsius on Thursday, down from Wednesday’s forecast of 1.8 degrees, before rising to 1.1 degrees on Friday.

* Flows from Norway through the Langeled pipeline are close to full capacity at 74 mcm/day. UK gas production is to remain stable at 109 mcm/d, Refinitiv Eikon data shows.

* The South Hook LNG terminal was set to receive a cargo on Feb. 9, according to shipping data.

* With spot Asian LNG prices for March delivery dipping below the front-month British gas price, LNG traders expect more cargoes to flow to Europe – an unusual situation in the global LNG market.

* Front-month British gas contract fell 0.65 pence to 53.45 p/therm.

* The March contract fell 0.9 pence to 51.80 p/therm.

* Day-ahead gas price at the Dutch TTF hub edged down by 0.27 euro to 19.88 euros per megawatt hour.

* Benchmark Dec-19 EU carbon contract fell 0.21 euro to 22.85 euros a tonne.
Source: Reuters (Reporting by Sabina Zawadzki; Editing by Dale Hudson)