March 31, 2017 / 8:52 AM / 4 months ago

UK GAS-Prices decline on oversupply, lower demand

2 Min Read

March 31 (Reuters) - Prompt British wholesale gas prices fell on Friday morning due to an oversupplied system and lower demand. * British day-ahead gas price inched down by 0.05 pence to 39.80 pence per therm at 0838 GMT. * Within-day contract down by 0.55 pence to 39.40 p/therm. * System undersupplied by 29.5 million cubic meters (mcm), with demand forecast at 212.1 mcm and flows at 241.6 mcm/day, National Grid data shows. * Demand forecast 31.5 mcm lower than seasonal normal demand. * "(UK gas) prompt has declined due to oversupply, which has pulled the day-ahead contract lower. Brent crude and API2 coal prices are down slightly today. These factors have pulled curve contracts lower," said Katrina Oldham, an energy trader at Inenco. * "Actual LNG (liquefied natural gas) send-out could impact the market next week depending on whether expectations are met," added Oldham. * Britain's Met Offices forecast temperatures could reach 15-16 degrees Celsius in the southeast of the country, falling to around 13 degrees C by next Tuesday. * Thomson Reuters analysts said strong supplies from Norway, lower exports through the InterconnectorUK and soft consumption were the main reasons for price declines. * Peak wind power output is forecast at 5.5 gigawatts (GW) for Friday, expected to fall to 3.4 GW on Saturday, National Grid data showed, which could boost gas-for-power demand. * Four LNG tankers are due to arrive in Britain over the next two weeks, adding to supplies. * April gas contract down by 0.35 pence to 40.25 p/therm. * Summer 2017 contract down by 0.58 pence to 40.05 p/therm. * Day-ahead gas price at the Dutch TTF hub up by 0.02 euro to 15.70 euros per megawatt hour. * Benchmark Dec-17 EU carbon contract down by 0.02 euro to 4.90 euros per tonne. * Thomson Reuters analyst view: here (Reporting by Lefteris Karagiannopoulos in Oslo; editing by Nina Chestney)

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