UK GAS-Rising demand supports prompt prices
British wholesale gas prices rose on Friday morning supported by an undersupplied system and expectations of higher demand, recovering some of the losses from earlier this week.
* The day-ahead contract rose 2.32 pence to 29.65 pence/therm by 1030 GMT.
* The within-day contract rose 2.00 pence to 29.50 pence/therm.
* Prices dropped considerably on Monday and Tuesday this week after Russia and Ukraine agreed on a new transit deal over the previous weekend.
* Britain’s gas market was 11.1 million cubic metres (mcm) undersupplied on Friday, with demand forecast at 259.1 mcm and supply at 248 mcm, National Grid data showed.
* The undersupply is a result of higher than previously expected gas demand and a drop in the amount of liquefied natural gas (LNG) sent to the system.
* Residential gas consumption was expected to be 4 mcm higher on Friday than previously forecast, while the day-ahead consumption forecast was lifted by 11 mcm, Refintiv data showed.
* Higher consumption is expected due to lower temperatures on Friday and next week.
* Average temperatures in Britain are expected to be at 6.6 C on Friday, 0.9 C lower than previously forecast. Temperatures for Monday were lowered by 1.6 C to 7.2 C from earlier predictions.
* Gas-for-power demand is expected to be 7 mcm higher on Friday and 12 mcm higher over the next week, compared to previous estimates.
* On the supply side, LNG sendout fell by 22 mcm from the previous working day to 44 mcm on Friday. The drop is largely due to lower sendout from the Dragon terminal.
* Up to 10 tankers are expected to unload at UK terminals by Jan. 12.
* Flows from Norway and the UK Continental Shelf were largely stable.
* Britain’s Atwick gas storage near Hornsea is on an unplanned outage until 1600 GMT on Friday, operator SSE said on Thursday. The outage is impacting 63 Gigawatt hour per day of withdrawal capacity.
* Wind generation is expected at 7.5 Gigawatts (GW) on Friday out of 15.3 GW capacity, Elexon data showed.
* Curve contracts also rose but less significantly than prompt products.
* The January contract was up 0.33 p at 33.45 p/therm.
* The day-ahead gas price at the Dutch TTF hub rose 0.93 euros to 11.93 euros per megawatt hour.
* The benchmark Dec. 20 EU carbon contract rose 0.35 euro at 26.43 euros per tonne.
* Oil prices rose, hitting three-month highs on Friday on upbeat economic data from China and the United States.
Source: Reuters (Reporting by Ekaterina Kravtsova; editing by Nick Macfie)