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UK gas-Prices firm on restocking, BBL exports

British wholesale gas prices firmed again on Thursday on continued restocking demand and exports to the continent, which offset rising Norwegian supply.

The within-day contract was up 0.40 pence at 69.00 pence per therm by 0930 GMT.

The day-ahead contract was up 0.50 pence at 68.75 p/therm.

The UK system was almost 18 million cubic metres (mcm) under-supplied, with demand forecast around 143 mcm/day and supply around 125 mcm/day, National Grid data showed.

The system shortness was driven by restocking of medium range storage (MRS) and a drop of 10 mcm/day in sendout of liquefied natural gas, analyst Xun Peng at Refinitiv said.

“Active BBL exports to the Continent together with solid MRS injection demand might support the price today,” the analyst added.

The BBL pipeline was exporting 14 mcm/day on Thursday.

MRS injections were at 29 mcm, helping to replenish low inventories of 320 mcm, compared with 1,000 mcm a year ago, Peng said.

This offset higher exports from Norway, where full shutdowns at gas field Troll and processing plant Kollsnes ended.

“The downside might come from soft gas for power demand, as strong renewables are expected on (the day-ahead),” Peng said.

Refinitiv lowered its gas for power demand for Friday by 7 mcm to 21 mcm/day.

Peak wind generation is forecast at 9.3 gigawatts (GW) today and 9.4 GW on Friday, out of total metered capacity of almost 20 GW, Elexon data showed.

Gas for delivery in July rose by 0.55 pence to 69.25 p/therm.

The Dutch July contract at the TTF hub was 0.32 euro higher at 28.30 euros per megawatt hour.

The benchmark Dec-21 EU carbon contract was 0.38 lower at 53.13 euros a tonne.

The UK Dec-21 carbon contract rose 0.14 pounds to 47.65 pounds per tonne.
Source: Reuters (Reporting by Nora Buli; editing by Emelia Sithole-Matarise)

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