UK GAS-Prices ease as higher supply offsets rise in demand

British wholesale gas prices fell on Wednesday as expectations of improving supply offset higher demand forecasts.

* The within-day contract was down 0.45 pence at 40.45 pence per therm by 1039 GMT.

* The day-ahead contract was down 0.20 pence at 40.30 p/therm.

* The British gas system was 10.6 mcm/day over-supplied, National Grid data showed.

* The end of a one-day outage at Norway’s Aasta Hansteen gas field on Thursday and increased send-out of liquefied natural gas (LNG) are bearish for prices, analysts at Refinitiv said in a morning note.

* “The improving LNG outlook and the reduced storage withdrawal in the mild weather does limit any upside significantly and we do not expect further gains today,” analysts at Energi Danmark also said in a morning note.

* Average temperatures are forecast to drop to 8.3 degress Celsius on Thursday from 11.9C today, according to Refinitiv data.

* Local distribution zone (LDZ) demand, mainly for heating, is expected to rise to 170 mcm/day on Thursday from 152 mcm/day on Wednesday, and gas-for-power demand will increase by 13 mcm to 53 mcm/day on Thursday, according to Refinitiv data.

* Peak wind generation is forecast at 14.7 gigawatts (GW) on Wednesday and 10.4 GW on Thursday, out of total metered capacity of around 18 GW, Elexon data showed.

* The March contract was down 0.05 p at 40.70 p/therm.

* The day-ahead gas price at the Dutch TTF hub was up 0.12 euro at 16.02 euros per megawatt hour, while the front-month was down 0.25 euros at 16.15 euros per megawatt hour.

* The benchmark Dec-21 EU carbon contract was down 0.18 euro at 38.49 euros per tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Nina Chestney)