UK GAS-Prices fall on warm weather, stronger wind

British wholesale gas prices fell on Tuesday, as warm weather and forecasts for stronger wind in coming days kept the system oversupplied.

The day-ahead contract was down 0.70 pence at 131 p/therm by 0824 GMT.

Britain’s gas system was 20 million cubic metres (mcm) over-supplied on Tuesday morning, National Grid data showed.

Peak wind power generation was expected to rise to 5.7 gigawatts (GW) on Wednesday from 2.9 GW on Tuesday, reducing gas demand for power generation out of a total capacity of almost 20 GW, Elexon data showed.

The current high temperatures in the UK are expected to decline gradually over the next few days closer to seasonal norms, analysts at Refinitiv said. However, the weather is expected to remain warm and no major rain and cool spells are likely before the end of the next week.

One LNG tanker, Al Dafna, is scheduled to arrive at South Hook on Sept. 10.

Despite Tuesday’s fall in prices, British gas prices remain at multi-year highs due to a relatively cold summer in parts of Europe, lower Russian exports to Europe and rising carbon prices which encourage utility firms and other industries to prioritise the use of gas over coal.

The last section of the Nord Stream 2 gas pipeline has been welded into place, its operator said on Monday. Russian Gas supplier Gazprom will double its export capacity via the Baltic Sea when operations begin, which the project’s operator said it expects by year-end.

The day-ahead contract at the Dutch TTF hub TRNLTTFD1 was down 0.23 euro at 51.90 euros per megawatt hour (MWh).

The benchmark Dec-21 EU carbon contract CFI2Zc1 was down 0.41 euro at 61.90 euros per tonne, after hitting a new record high on Monday.
Source: Reuters (Reporting by Bozorgmehr Sharafedin; Editing by Susan Fenton)