UK GAS-Prompt prices soar on cooler temperatures, low wind power

Prompt British wholesale gas prices soared on Monday morning as cooler temperatures and forecasts for lower output from the country’s wind farms boosted demand for gas.

* The within-day contract was up 2.20 pence at 12.50 p/therm by 08.46 GMT.

* The day-ahead contract was up 1.65 pence at 12.35 p/therm.

* Traders said that although demand is still fairly weak, below -temperature forecasts on Monday provided some respite for prices which last week hit record lows due to restrictions across Europe on industry and households to prevent the spread of the novel coronavirus.

* Average temperatures in Britain were forecast at 10.2 degrees Celsius on Monday and 8.2 degrees on Tuesday, Refinitiv Eikon data showed.

* The forecasts were 1.8 degrees and 2.7 degrees lower respectively than previous expectations.

* “Day-ahead LDZ (local distribution zone) consumption is adjusted up as temperatures are expected to drop below normal tomorrow and remain below seasonal normal until the end of the week,” the Refinitiv analysts said in a daily research note.

* Peak wind power generation is forecast at 1.8 gigawatts (GW) on Monday and 2.9 GW on Tuesday, Elexon data showed, out of a total metered capacity of around 15 GW.

* Low wind output typically increases demand from gas-to-power plants.

* Britain’s gas system was almost balanced, with demand forecast at 201.4 million cubic metres (mcm) and flows at 201.2 mcm/day, National Grid data showed.

* The May contract was up 0.20 p at 13.00 p/therm.

* Further out on the curve prices dipped, tracking losses in the oil markets, traders said.

* The Winter 2020 contract was down 0.27 at 32.00 p/therm.

* U.S. oil futures fell by more than $2 a barrel on fears that storage at Cushing, Oklahoma, could soon reach full capacity.

* The day-ahead gas price at the Dutch TTF hub was up 0.10 euro at 5.20 euros per megawatt hour.

* The benchmark Dec-20 EU carbon contract was up 0.19 euro at 20.50 euros per tonne.
Source: Reuters (Reporting By Susanna Twidale; editing by Nina Chestney)