UK GAS-Prices rise on low wind output, upcoming auction
British wholesale gas prices rose on Monday morning as wind generation remained very low and as both the UK and Dutch markets awaited the result of a gas transit capacity auction.
The day-ahead contract was up by 3.55 pence to 90.00 pence per therm by 0745 GMT.
The August contract was 3.45 pence higher at 89.20 p/therm.
Wind output remains low and is not expected to return to normal levels until the end of the week, she added.
Peak wind generation is forecast at 1.6 gigawatts (GW) on Monday and under 1 GW on Tuesday, out of total metered capacity of around 20 GW, Elexon data showed.
Low wind output typically increases demand for gas from power plants.
The Dutch and UK gas markets are also watching a gas transit capacity auction today.
“Given the previous months’ results and the EU Court of Justice decision, the expectation is that Gazprom will highly likely book 15 million cubic metres (mcm) offered on Sudzha border point,” said Refinitiv gas analyst Katarzyna Piaskowska.
On the supply side, Norwegian flows through the Langeled pipeline seem to be unaffected by maintenance at the Troll field which started on Friday, currently flowing at 52 mcm a day, Refinitiv Eikon data showed.
Outages in the UK Continental Shelf are also expected to end today which will boost flows from tomorrow.
The system was 10 mcm over-supplied, with demand forecast at 133 mcm and supply at 143 mcm/day, National Grid data showed.
The month-ahead Dutch gas contract rose by 1.05 euro to 36.45 euros per megawatt hour.
The benchmark Dec-21 EU carbon contract was 0.22 euro higher at 53.11 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)