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UK GAS-Prices fall as milder weather returns

British wholesale gas prices fell on Friday morning as expectations of milder weather for the rest of February curbed demand.

* Within-day gas price down 0.30 pence at 47.00 p/therm by 0924 GMT.

* Day-ahead gas price down 0.30 p to 46.55 p/therm.

* Traders and analysts said weather forecasts indicated temperatures would be higher than seasonal norms for the rest of February while strong output from the country’s wind farms was also expected to curb demand over the next few days.

* “European gas markets have become extremely bearish, with weather forecasts converging on consistently mild weather,” analysts at Energy Aspects said in a research note.

* Average temperatures in Britain are expected at 6.6 degrees Celsius on Friday rising to 8.1C by Monday, Eikon Refinitiv data showed.

* The milder temperatures have led to a 7 million cubic metre (mcm) decrease in expected day-ahead local distribution zone gas demand to 177 mcm, Refinitiv analysts said in a daily research note.

* The gas system is oversupplied by 6.7 mcm with demand forecast at 259 mcm and flows at 265.7 mcm/day, National Grid data showed.

* Friday’s demand was 8.3 below normal seasonal demand of 282.4 mcm/day, the data showed.

* Peak wind power generation is forecast at 7.9 gigawatts (GW) on Friday, rising to 8.7 GW on Saturday, National Grid data showed.

* Further out on the curve prices also fell.

* March contract down 0.25 p at 46.95 p/therm.

* Summer 2019 contract down 0.03 p at 45.60 p/therm.

* Day-ahead gas price at the Dutch TTF hub down 0.12 euro at 17.63 euros per megawatt hour.

* Benchmark Dec-19 EU carbon contract up 0.14 euro at 19.90 euros per tonne.
Source: Reuters (Reporting By Susanna Twidale; editing by Nina Chestney)

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