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UK gas-Prices hit fresh multi-year highs on supply worries, low storage

British wholesale gas prices firmed on Wednesday morning to fresh multi-year highs, amid lower flows from Norway, wider supply concerns and as storage levels remain very low.

The July contract TRGBNBPMN1 gained 1.20 pence to 84.50 p/therm, a level not seen since 2008.

The within-day contract TRGBNBPWKD was up 1.50 pence at 84.50 pence per therm by 0847 GMT, while the day-ahead contract TRGBNBPD1 was up 2.00 pence at 85.00 p/therm, their highest levels since March 2018.

“Record low medium-range storage inventory might continue supporting the front-end curve,” analysts at Refinitiv said.

Norwegian exports are nominated at 7 million cubic metres (mcm) a day lower due to maintenance at the Aasta Hansteen field, they added.

Liquefied natural gas (LNG) send-out is flat and gas-for- power demand is forecast to rise by 7 mcm to 58 mcm/day on Wednesday, amid low wind generation, according to Refinitiv.

Peak wind generation is forecast at 3.3 gigawatts (GW) today and 2.4 GW tomorrow, out of total metered capacity of nearly 20 GW, Elexon data showed.

The gas system was around 2 mcm over-supplied on Wednesday morning, National Grid data showed.

The front-month gas price at the Dutch TTF hub TRNLTTFMc1 was 0.55 euro higher at 34.13 euros per megawatt hour, also a 13-year high.

Very low storage levels, a tight Asian gas market amid hot weather there and lack of additional Russian supplies created a bullish market, a trader said.

Russia’s Gazprom did not booking any interruptible transit capacity through Ukraine for July to offset lower Yamal and Nord Stream pipeline volumes due to planned maintenance, Refinitiv’s analysts said.

The benchmark Dec-21 EU carbon contract CFI2Zc1 rose by 0.25 euro to 55.89 euros a tonne.

The benchmark Dec-21 British carbon contract UKAFMc1 was up 0.10 pounds at 46.90 pounds a tonne.
Source: Reuters (Reporting by Nora Buli in Oslo; editing by Nina Chestney)

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