UK GAS-Prices rise as field output declines ahead of maintenance
British wholesale gas prices rose on Wednesday morning as UK gas fields started to ease output ahead of maintenance outages starting from tomorrow.
* Day-ahead gas jumped by nearly 10% to 29.50 pence per therm at 0751 GMT.
* Gas for immediate delivery was up 6% at 28.00 p/therm.
* “Heavy summer maintenance is starting – some fields are going down (in output),” a gas trader said.
* UK Continental Shelf fields are expected to ramp down ahead of a number of outages scheduled from Aug. 1.
* Maintenance outages will impact entrants into the Forties and CATS pipeline form tomorrow, including various fields into the St. Fergus terminal and the Cygnus field.
* Refinitiv analysts forecast flows of 47 mcm/day from tomorrow, rising to 67 mcm/day by Aug. 10 and 95 mcm/day by mid-August.
* “There is a small probability that fields will remain offline longer than scheduled. This would likely be for commercial reasons due to low prompt prices,” said gas analyst Oliver Sanderson.
* Norwegian gas field Troll has also reduced production for commercial reasons.
* Despite this, the system is oversupplied by around 14 million cubic metres (mcm), with demand forecast at 124 mcm and flows at 138 mcm/day, National Grid data shows.
* This is because gas-for-power demand is reduced due to strong wind output.
* Peak wind generation is forecast at 6.8 gigawatts (GW) but will fall to 4.8 GW on Thursday, Elexon data shows.
* The August contract was up 1.00 pence at 29.50 p/therm.
* Dutch August gas at the TTF hub was 0.30 euro higher at 10.35 euros per megawatt hour.
* The benchmark EU carbon price was up 0.37 euro at 28.27 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)