UK GAS-Prices edge down on mild temperatures
British wholesale gas prices edged down on Friday morning as mild temperatures continued to reduce demand for heating.
* Within-day gas price edged down by 0.10 pence to 44.60 p/therm at 0907 GMT.
* Day-ahead gas price inched down by 0.05 pence to 44.75 p/therm.
* Prices have declined due to lower demand for heating as a result of milder-than-average temperatures which are expected to continue for the rest of this month, traders said.
* “With north west European weather forecasts promising a warmer-than-normal remainder of February and start to March, there is little remaining upside to prices this winter,” said analysts at consultancy Energy Aspects.
* “From now on, temperatures will generally be on the rise, so any deviation below normal will bring a relatively smaller increase in heating demand,” they added.
* More substantial falls in prompt gas prices on Friday have been capped due to a short system, traders said.
* The system is undersupplied by 8 million cubic metres (mcm) with demand forecast at around 230 mcm and flows at 222 mcm/day, National Grid data shows. Demand is around 47 mcm below the seasonal norm.
* Undersupply has been caused by a reduction in flows from Norway through the Langeled pipeline due to two outages there, which are due to end at the weekend.
* In the Dutch gas market, the day-ahead price at the TTF hub down 0.20 euro at 17.30 euros per megawatt hour.
* In Europe, gas has been more competitive to burn than coal since the beginning of this year.
* “With a growing stock surplus set to pare summer injection demand, the market is already pricing in as much gas as possible into the power sector,” Energy Aspects said.
* “Summer 2019-delivery gas prices have been closing around the 5 percent fuel switch trigger since early January, which puts nearly all gas-fired units into merit over coal plants, adding a maximum 12 bcm to power sector gas demand,” it added.
* Benchmark Dec-19 EU carbon contract down 0.14 euro at 18.66 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)