UK GAS-Prices inch up amid lower imports
British wholesale gas prices inched up slightly on Wednesday morning, amid lower Norwegian flows, but wind power output is forecast to increase from tomorrow.
* The day-ahead contract was flat at 105.50 pence per therm by 0905 GMT, but the contract has risen more than 80% since the start of the year due to tight supplies.
* The September contract inched up by 0.10 pence to 105.50 p/therm and the October contract was 0.90 pence higher at 106.45 p/therm.
* The UK system was nearly 4 million cubic metres (mcm) under-supplied, with demand forecast at 125.5 mcm and supply at 121.5 mcm/day, National Grid data showed.
* Norwegian flows declined on Wednesday, with a drop in imports via the Langeled pipeline, according to Refinitiv Eikon data.
* But the Troll gas field is scheduled to come back online after maintenance tomorrow which could help flows recover.
* The lack of arrivals of liquefied natural gas (LNG) tankers also lent some support, with no tankers currently scheduled to arrive
* “Last month, the UK imported just only one LNG cargo as compared to seven cargoes for the same period in 2020. This was the lowest number of LNG cargoes imported to the country since August 2019 according to our flows data,” said Olumide Ajayi, senior LNG analyst at Refinitiv.
* The shortage of LNG supplies is because “Asia continues to soak up flexible cargoes from the Atlantic Basin,” he added.
* Wind power output remained low, but is expected to pick up later this week. Peak wind generation is forecast at 2.7 gigawatts (GW) on Wednesday and 9.5 GW on Thursday, Elexon data showed, out of total capacity of around 20 GW.
* The gas price at the Dutch TTF hub for the next day delivery rose by 0.25 euro to 41.50 euros per megawatt hour.
* The prices at TTF hub were near record highs as the supply situation in Europe was tight due to a long winter which has left inventories much lower than usual.
* The benchmark Dec-21 EU carbon contract rose by 0.54 euro to 54.73 euros a tonne.
* The benchmark Dec-21 British carbon contract was up 0.33 pounds to 45.95 pounds per tonne.
Source: Reuters (Reporting by Bozorgmehr Sharafedin; editing by Nina Chestney)