UK GAS-Prices slump on weak demand

British wholesale gas prices slumped on Thursday morning due to expectations of a drop in gas-for-power demand.

* The day-ahead contract was 1.25 pence lower at 9.25 pence per therm at 0855 GMT.

* The within-day contract dropped by 1.50 p to 9.75 p per therm.

* UK gas-for-power demand is expected to fall on Friday when wind generation is forecast to ramp up.

* Peak wind generation is forecast to soar to 13.7 gigawatts (GW) on Friday from 5.7 GW on Thursday, Elexon data showed.

* Gas-for-power demand is expected at 7 mcm on Friday, compared to 32 mcm on Thursday, Refintiv data showed.

* The system was undersupplied by 4.8 million cubic metres (mcm) with demand forecast at 177.1 mcm and flows at 172.3 mcm/day, National Grid data shows.

* “The UK gas balance has reached a deadlock for the summer,” consultancy Wood Mackenzie said.

* It added that as the lockdown is placing huge pressure on electricity and fuel markets and UK gas demand will be weak throughout the summer.

* “We expect that demand will come in 18% below its five-year average,” said Hadrien Collineau, senior analyst at Wood Mackenzie.

* In the Dutch gas market, day-ahead gas price at the TTF hub dropped by 0.40 euro to 3.55 euros per megawatt hour.
Source: Reuters (Reporting by Ekaterina Kravtsova)