UK GAS-Warmer weather, higher wind power output weigh on prices

British wholesale gas prices fell on Friday morning as temperatures and wind power output were set to rise to above normal levels, denting gas demand.

* Gas for immediate delivery fell 1.5 pence to 25.50 pence per therm by 0940 GMT.

* Gas for delivery next week was down by 0.85 pence at 24.50 p/therm.

* Temperatures are expected to rise above the seasonal normal over the weekend, and fall below it in the second half of next week, Refinitiv Eikon data shows.

* Peak wind generation is also forecast to rise to above normal levels of 13.4 GW on Saturday from 3.4 GW on Friday, Elexon data shows.

* Higher wind power output typically leads to lower demand from gas-to-power plants.

* Coronavirus outbreak could reduce economic activity and dent industrial demand for gas and power generation in Europe, Energy Aspects said in a note on Thursday.

* “While it is difficult to quantify the potential impact of the virus, COVID-19 concerns represent further downside risk to an already loose set of gas balances,” it added.

* The British gas system was undersupplied on Friday morning by around 9 million cubic metres (mcm), with supply forecast at 312 mcm/day and demand at 321 mcm, National Grid data shows.

* Supply from LNG terminals was lower than the previous day, but flows from UK continental shelf rose and maintenance at Barrow North terminal was expected to end today, National Grid data shows.

* The April contract was 0.30 pence lower at 22.10 p/therm.

* In the Dutch gas market, day-ahead gas at the TTF hub was down by 0.35 euro at 9.05 euros per megawatt hour.

* The benchmark Dec-20 EU carbon contract was down by 0.35 euro at 23.46 euros a tonne.
Source: Reuters (Reporting by Nerijus Adomaitis in Oslo; Editing by Vinay Dwivedi)