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UK GAS-Prices fall on oversupply due to weak demand

British wholesale gas prices dropped on Friday morning due to the oversupply of the gas system amid a drop in gas-for-power demand.

* The day-ahead contract fell by 0.25 pence to 13.50 pence per therm by 0843 GMT.

* The weekend gas contract fell by 0.50 pence to 13.10 p/therm.

* Britain’s gas system was oversupplied by 14 million cubic metres (mcm) with demand forecast at 172.9 mcm and flows at 186.9 mcm/day, National Grid data showed.

* Weaker demand for gas in power generation was the main cause for the oversupply, analysts at Refinitiv said.

* Gas-for-power demand was forecast at 43 mcm on Friday, a 10 mcm drop from the previous day, Refinitiv Eikon data showed.

* Gas demand for power generation is expected to go slightly up on Monday, which may result in a tighter balance, Refinitiv analysts added.

* Wind output is expected to be subdued.

* Peak wind generation was expected at 5.2 gigawatts (GW) on Friday, falling to 3.9 GW on Saturday, Elexon data showed.

* Gas supply was stable, with flows from Norway going up by 2 mcm up and liquefied natural gas (LNG) sendout falling by 2 mcm.

* The August contract was down 0.51 p at 14.00 p/therm.

* The day-ahead price at the Dutch TTF hub inched up by 0.03 euro to 4.78 euros per megawatt hour (MWh).

* A gas trader said that TTF day-ahead may be impacted by the upcoming maintenance on Nord Stream pipeline starting next week.

* The TTF August fell by 0.15 euro to 5.60 euros/MWh.

* The benchmark Dec-20 EU carbon contract was down 0.69 euro at 27.92 euros per tonne.
Source: Reuters (Reporting By Ekaterina Kravtsova; editing by Nina Chestney)

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