UK GAS-Prices fall on warm weather, higher wind output forecasts

British wholesale gas prices fell on Wednesday morning as warm weather and expectations of higher wind output curbed demand.

* The within-day contract was down 0.75 pence at 16.50 pence per therm by 0922 GMT.

* The day-ahead contract was 0.45 pence lower at 16.35 pence per therm.

* Temperatures are forecast above average until Sunday.

* Gas-for-power demand for the day-ahead is forecast at 49 million cubic metres (mcm) a day, 7 mcm lower from the previous forecast, Refinitiv Eikon data shows.

* Peak wind generation is expected to be 4.9 gigawatts (GW) on Wednesday, rising to 6.2 GW on Thursday, according to Elexon data.

* Higher wind output typically reduces demand from gas-to-power plants.

* Flows were forecast at 207 mcm/day and demand at 211 mcm, leaving the system slightly undersupplied, National Grid data shows.

* The May gas contract was down by 0.10 pence at 16.90 p/therm.

* Due to coronavirus lockdowns, demand in France, Italy, Spain, and Britain is now significantly below the 2015–19 range, said IHS Markit.

* “There are signs that demand is stabilizing in those markets with lockdowns in place the longest. Across much of Europe the weekday profile now resembles what you would see during a typical weekend. For European power, every day is a Sunday,” said Catherine Robinson, executive director at IHS Markit.

* The day-ahead gas price at the Dutch TTF hub was 0.14 euro lower at 7.18 euros per megawatt hour.

* The benchmark Dec-20 EU carbon contract was 0.30 euro lower at 20.21 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)