UK GAS-Prompt prices rise as system heavily undersupplied
Prompt British wholesale gas prices rose on Monday morning supported by an strongly undersupplied gas system.
* The day-ahead contract rose 0.15 pence to 33.50 p/therm by 0920 GMT.
* The within-day contract traded flat to its Friday level at 34.00 p/therm.
* The working-days-next-week (WDNW) rose 1.25 p to 33.25 p/therm.
* The day-ahead is trading cheaper than the Summer 20 contract, which shows how oversupply caused by an LNG influx and mild demand this year reshuffled the usual price spreads in Europe.
* On Monday the gas system was strongly undersupplied, with demand forecast at 297.8 million cubic metres (mcm) and supply at 253.7 mcm, National Grid data showed.
* The undersupply was caused by a sharp drop in sendout from LNG terminals, which dropped by 39 mcm from Friday level.
* Despite a drop in LNG sendout on Monday, those are likely to surge again, with seven more tankers signalling Britain as their destination on Monday.
* A total of 20 tankers are expected in Britain by Jan. 1.
* Britain was expected to export around 13 mcm to Belgium on Monday, further tightening the gas system.
* Norwegian flows to Britain were expected to rise by around 10 mcm on Monday compared with day volumes, Gassco data showed.
* Flows from the UK Continental Shelf were also predicted to increase by 14 mcm from the previous business day.
* Wind generation is expected to be strong, at 12.5 Gigawatts on Monday and 13.3 GW on Tuesday, Elexon data showed, which usually reduces demand for gas in power generation.
* Both residential and gas-for-power demand were expected to increase next week, supporting the WDNW contract.
* The January contract was down 0.78 pence at 38.00 p/therm.
* The day-ahead gas price at the Dutch TTF hub was down 0.60 euro at 13.60 euros per megawatt hour.
* The benchmark Dec-19 EU carbon contract was down 0.36 euro at 24.58 euros per tonne.
Source: Reuters (Reporting by Ekaterina Kravtsova, editing by Louise Heavens)