UK GAS-Prices edge higher on strong power demand


UK GAS-Prices edge higher on strong power demand

British wholesale gas prices edged higher on Tuesday morning on strong demand from power plants, but traders said oversupply and weak demand amid mild temperatures limited gains.

* Within-day gas price up 0.10 pence at 43.60 pence per therm by 0911 GMT.

* Day-ahead gas price up 0.50 pence at 44.40 p/therm.

* Traders said prices nudged higher as forecasts for low output from the country’s wind farms led to strong demand for gas from power stations.

* Peak wind power generation is forecast at 3.3 gigawatts (GW) on Tuesday, dropping to 2.3 GW on Wednesday compared with total capacity of more than 12 GW, National Grid data showed.

* Gas-fired power plants were providing around 55 percent of Britain’s electricity on Tuesday morning.

* Traders said mild weather and strong imports from Norway and supplies of liquefied natural gas (LNG) had curbed gains and the market was vulnerable to turning bearish.

* Gas system oversupplied by 13 million cubic metres (mcm) with demand forecast at 243.2 mcm and flows at 256.2 mcm/day, National Grid data showed.

* “Oversupply continues to be caused by strong LNG, especially Isle of Grain (LNG terminal) which is flowing 30 mcm,” analysts at Refinitiv said in a daily research note.

* Further out on the curve prices also edged higher, buoyed by slightly firmer oil prices.

* March contract up 0.32 p at 44.45 p/therm.

* Summer 2019 contract up 0.25 p at 44.25 p/therm.

* Day-ahead gas price at the Dutch TTF hub up 0.28 euro at 17.13 euros per megawatt hour.

* Benchmark Dec-19 EU carbon contract up 0.31 euro at 19.55 euros per tonne.

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