UK GAS-Prices fall on oversupply, strong wind
British wholesale gas prices fell on Tuesday as high wind reduced demand for power generation and left the market oversupplied.
* Gas for immediate delivery fell by 1.50 pence to 37.00 pence per therm by 0900 GMT.
* Gas for the day-ahead was 0.65 pence lower at 37 p/therm.
* The system was over-supplied by around 22 million cubic metres (mcm), with demand forecast at 186 mcm and supply at almost 208 mcm/day, National Grid data showed.
* The oversupply stemmed mostly from “extreme winds” and low gas for power demand, said a trader.
* High wind output typically reduces demand for gas from power plants.
* Peak wind generation is forecast at 13.9 gigawatts (GW) on Tuesday and 14.1 GW on Wednesday, out of total metered capacity of around 18 GW, Elexon data showed.
* Wind power generation should remain strong until later this week, analysts at Refinitiv said in a daily report.
* However, a small drop in temperatures should lift local distribution zone demand by 10 mcm to 152 mcm/day on Wednesday, 8 mcm above a previous forecast, they added.
* This would be balanced from higher sendout of liquefied natural gas (LNG) from the Dragon terminal, according to Refinitiv.
* “Our latest EC45 forecast indicates relatively normal gas demand is most likely until end of 2020 from next week,” they added.
* The contract for weekdays next week was down 0.25 pence at 39 p/therm.
* In the Dutch gas market, the December TTF gas price was down 0.30 euro at 14.15 euro per megawatt hour.
* The benchmark Dec-20 EU carbon contract was 0.43 euro lower at 26.96 euros a tonne.
Source: Reuters (Reporting by Nora Buli; Editing by Edmund Blair)