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UK GAS-Prompt prices fall on strong LNG, increasing wind

Prompt British wholesale gas prices dropped on Tuesday morning, pressured by strong supplies of liquefied natural gas (LNG), full gas stocks and rising wind generation.

* The day-ahead contract was down 1.20 pence at 26.00 p/therm by 0955 GMT.

* The within-day gas contract was down 0.75 pence at 25.50 p/therm.

* The UK gas system was 17.7 million cubic metres (mcm) oversupplied, with demand forecast at 280.2 mcm and supply at 297.9 mcm, National Grid data showed.

* Ten LNG tankers are scheduled to unload in Britain by the end of next week, keeping LNG sendout high.

* Wind generation is forecast to increase to 7.3 gigawatts on Wednesday from 4.9 GW on Tuesday, Elexon data showed.

* Higher wind production tends to reduce gas-for-power demand.

* “UK wind speeds are expected to increase over the week, peaking during the weekend. Wind power generation will continue high early next week declining again towards the end of the week,” Refinitiv analysts said in a morning gas report.

* A drop in flows from Norway and strong residential gas demand did little to balance the system.

* Residential gas consumption is higher than seasonal norms, with colder weather expected to continue until Friday and again next week, which will keep residential demand high.

* Temperatures have been revised up slightly for the rest of this week, however, which a source active on the UK gas market said was another bearish factor for prices.

* Flows from Norway via the Langeled pipeline were at 52 mcm on Tuesday morning, a 17-mcm drop from the Monday level, Gassco data showed.

* Norwegian gas production was down 8 mcm, with an unplanned outage at the Kvitebjorn field expected to reduce output by around 6 mcm on Tuesday and by 1 mcm on Wednesday.

* Britain’s medium-range storage (MRS) is 19% fuller than a year earlier, Refinitiv Eikon data showed.

* The November contract rose 0.30 p to 37.60 p/therm, however, supported by expectations of higher-than-normal residential gas demand in November.

* The day-ahead gas price at the Dutch TTF hub was up 0.10 euro at 11.40 euros per megawatt hour.

* The TTF November contract was down 0.02 euro at 14.48 euros/MWh.

* The benchmark Dec-19 EU carbon contract was up 0.24 euro at 25.36 euros per tonne.
Source: Reuters (Reporting by Ekaterina Kravtsova; Editing by Dale Hudson)

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