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UK GAS-Prices rise as Norwegian gas flows drop

British prompt wholesale gas prices rose on Wednesday as heavy maintenance among Norwegian producers curbed supplies and low wind speeds lifted demand from power plants to replace output from turbines.

The within-day contract was up by 3.25 pence at 135.50 pence per therm by 0835 GMT.

The day-ahead contract was 2 pence higher at 136 p/therm.

Norwegian gas flows dropped sharply due to maintenance at the giant Troll gas field and other infrastructure, analysts said.

“European gas balances should therefore remain tight, with prices likely to continue to increase,” analysts at Engie said in a morning note.

Britain’s gas system was forecast at 8 million cubic metres (mcm) over-supplied on Wednesday morning, with demand forecast at 131 mcm and supply at 138 mcm/day, National Grid data showed.

However live flows via the key Langeled pipeline from Norway stood at zero and withdrawals from Britain’s medium range storage will likely step up over the day to fill the gap, analysts at Refinitiv said in their morning report.

A compressor trip also cut 7.7 mcm/day of capacity at the Barrow terminal receiving gas from the Irish Sea.

Gas for power demand was also revised 9 mcm/day higher for Wednesday amid low wind, Refinitiv data showed.

Peak wind power generation was expected to drop to 4 gigawatts (GW) on Thursday from 4.8 GW on Wednesday, out of a total metered capacity of nearly 20 GW, Elexon data showed.

The October gas price at the Dutch TTF hub was up by 0.18 euros at 53.85 euros per megawatt hour (MWh) but down from a new record high of 54.60 euros seen earlier in the day.

Low storage levels remain a supply risk for the winter, but a number of scheduled liquefied natural gas (LNG) tanker arrivals to north-western Europe could weigh on prices on Wednesday, Refinitiv said.

The benchmark Dec-21 EU carbon contract was up 0.08 euro at 62.07 euros per tonne.

The benchmark Dec-21 British carbon contract was down by 0.20 pound at 53.30 pounds a tonne.
Source: Reuters (Reporting by Nora Buli; Editing by Jan Harvey)

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