UK GAS-Prompt prices nudge higher as wind power falls

Prompt British wholesale gas prices edged higher on Wednesday morning, as forecasts for lower wind power output boosted demand for gas.

* The day-ahead contract was up 0.25 pence at 10.00 p/therm by 0844 GMT.

* Traders said an increase in gas for power demand had provided a little support but fundamentally demand is still incredibly weak and shippers may need to turn to export to sell excess gas as storage sites fill.

* Britain’s gas system was almost balanced with demand forecast at 200.2 million cubic metres (mcm) and flows at 201.3 mcm/day, National Grid data showed.

* Peak wind power generation is forecast at 9 gigawatts (GW) on Wednesday falling to 6.3 GW on Thursday, Elexon data showed.

* “UK MRS (medium range storage) inventory only have around 750 mcm capacity to absorb excessive gas as of today,” analysts at Refinitv said in a daily research note.

* Refinitv analysts said with European benchmark Dutch gas prices trading higher than UK prices more British gas could be exported to the Continent.

* Britain became the world’s cheapest market for gas this week after front-month prices fell below U.S. Henry Hub prices for the first time in over a decade.

* Gas exports from Britain via the BBL pipeline to the Netherlands and the IUK pipeline with Belgium were up 5 mcm at 49 mcm/day, Refinitiv Eikon data showed.

* The May gas contract was down 0.21 p at 13.99 p/therm.

* The day-ahead gas price at the Dutch TTF hub inched up by 0.02 euro to 5.97 euros per megawatt hour.

* The benchmark Dec-20 EU carbon contract was up 0.13 euro at 19.98 euros per tonne.
Source: Reuters (Reporting By Susanna Twidale; editing by Nina Chestney)