UK GAS-Prices mostly down on correction, increased supply

British wholesale gas prices were mostly down on Friday morning as prices corrected gains over the past week and Norwegian imports increased.

The day-ahead contract was 0.90 pence lower at 104.10 pence per therm by 0824 GMT, having reached its highest level since March 2018 on Thursday.

The August contract declined by 0.60 pence to 104.00 p/therm.

“There is some correction on the prompt and supply has gone up,” a gas trader said.

The system was around 14 million cubic metres (mcm) over-supplied, with demand forecast at 143 mcm and supply at 157 mcm/day, National Grid data showed.

Norwegian imports have increased with Langeled pipeline flows up by 10 mcm at 50 mcm/day.

More supply is expected next week if planned outages, particularly in Britain, end as scheduled.

Wind power generation is expected to fall over the weekend and early next week before rising again from the middle of next week.

Refinitiv analysts forecast an increase of gas-for-power demand for the day ahead of 16 mcm.

Consultancy Energy Aspects said it has increased its expectations of Chinese liquefied natural gas (LNG) demand this summer due to an uptick in industrial demand but also hot weather in north-east Asia.

“There is still also ample incentive for Asian firms to take their LNG supply well ahead of winter, given the risks of another run-up in Asian spot prices like last January,” the consultancy said.

“Threats to Europe’s LNG receipts over the coming months mean that TTF near-curve price risks are mainly to the upside.”

“But the key tension is between how much European firms will hedge their winter supply by locking away in storage now and how much firms are willing to wait until winter and the assumed start-up of Nord Stream 2,” it added.

The August price at the Dutch TTF hub was 0.80 euro lower at 40.40 euros per megawatt hour.

The benchmark Dec-21 EU carbon contract was down by 0.78 euro at 53.27 euros a tonne.

The benchmark Dec-21 British carbon contract was 0.56 pound lower at 43.41 pounds per tonne.
Source: Reuters (Reporting by Nina Chestney)