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UK GAS-Prices fall in oversupplied market capped by high storage

British wholesale natural gas prices fell on Tuesday as weak demand and a slight increase in production led to an oversupplied market with storage unable to take much more gas.

* Within-day gas prices fell by 1.55 pence to 27.00 pence per therm by 0745 GMT

* Day-ahead gas was 0.9 pence lower at 27.25 pence per therm.

* The system was oversupplied by 11 million cubic metres (mcm), with demand forecast at 122.6 mcm and supply seen at 133.6 mcm, National Grid data showed.

* Supplies from the UK Continental Self increased by 6 mcm, offsetting a fall of flows along the Langeled pipeline from Norway of 5 mcm, Refinitiv data showed.

* The supply increase came from the ramp up at the Bacton and Teesside facilities after maintenance work there ended.

* The fall in contracts this week marks a return of the downward trend from last month as ample supplies of gas in Europe has depressed prices throughout the year.

* In Britain, medium-range storage (MRS) facilities were 86%full compared with 66% at the same time last year, leaving little room for excess supplies.

* “Once you get limited by (storage) injection flow rates, the price will dump,” said one trader.

* A 3% fall in crude oil prices, due to the deepening of the trade war between the United States and China, has weighed on the European energy complex, Refinitiv gas analysts said.

* Wind generation is expected to be stable at around 5.6 gigawatts (GW) on Tuesday compared to 6 GW on Monday and 5.7 GW on Wednesday.

* On the demand side, gas for power demand was seen at 37 mcm, a touch higher than on Monday, while residential gas demand was expected to be 56 mcm.

* The month-ahead contract fell 0.77 pence to 30.75 pence per therm.

* Dutch day-ahead gas fell 0.27 euro to 9.80 euros per megawatt hour.

* The Dutch September contract was down 0.33 euro at 11.10 euros/MWh.

* The benchmark EU carbon price fell 0.32 euro to 28.38 euros a tonne.
Source: Reuters (Reporting by Sabina Zawadzki, editing by Louise Heavens)

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