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)