UK GAS-Prompt prices decline on reduced demand, high storage levels
British prompt wholesale gas prices declined on Tuesday morning on above average temperatures, reduced demand and high storage levels.
* The day-ahead contract was down by 0.15 pence at 11.25 pence per therm at 0926 GMT.
* Gas for working days next week was 0.50 pence lower at 11.25 p/therm.
* Traders said warm weather and weak demand was weighing on prices.
* “Extremely weak local distribution zone demand has offset slightly higher gas-for-power demand and higher storage inventories might continue weigh on the price today,” Refinitiv gas analysts said.
* Warmer than normal weather is expected to continue across the upcoming long bank holiday weekend.
* Britain’s gas system was almost balanced with demand forecast at 184.5 million cubic metres (mcm) and flows at 181.2 mcm/day, National Grid data showed.
* Imports to Britain via Langeled were at 16 million cubic metres (mcm)/day, down 1 mcm compared with the previous day, Refintiv Eikon data showed.
* Flows from the country’s liquefied natural gas (LNG) terminals were at 54 mcm down 1 mcm, the data showed.
* Demand for gas from power stations was forecast at 41 mcm for Tuesday, Refinitiv data showed, up 15 mcm from the previous forecast.
* Peak wind generation is forecast at 4.5 gigawatts on Tuesday, down from around 8 GW the previous day.
* On Wednesday, peak wind output is expected at 5.6 GW, out of a total metered capacity of around 15 GW, Elexon data shows.
* Fundamentally, gas demand is expected to remain weak this year due with industrial production curbed by measures designed to limit the spread of the novel coronavirus.
* Analysts at Rystad Energy forecast global demand for natural gas is expected to fall by almost 2% in 2020.
* Further out on the curve contracts edged higher.
* The Winter 2020 contract was up 0.05 p at 32.80p/therm.
* The Summer 2021 contract was up 0.05 at 30.15 p/therm.
* The day-ahead gas price at the Dutch TTF hub was down 0.10 euro at 4.40 euros per megawatt hour.
* The benchmark Dec-20 EU carbon contract was down 0.19 euro at 20.15 euros per tonne.
Source: Reuters (Reporting by Susanna Twidale; editing by Nina Chestney)