July 3, 2020 / 9:10 AM / a month ago

UK GAS-Prices mostly fall on strongly oversupplied system

LONDON, July 3 (Reuters) - British wholesale gas prices mostly fell on Friday morning due to the gas system being oversupplied on lower gas-for-power demand.

* The within-day contract fell by 0.45 pence to 13.75 pence/therm by 0852 GMT.

* The weekend contract was down by 0.20 p to 14.00 p/therm.

* The UK gas system was 24.2 million cubic metres (mcm) oversupplied, with demand forecast at 153.8 mcm and supply at 178 mcm, National Grid data showed.

* The oversupply was due to a drop in demand from power generators, which has slumped by over half in comparison to yesterday, Refinitiv analysts said in a morning note.

* Peak wind generation is forecast to jump to 10.6 gigawatts (GW) on Friday from 2.9 GW on Thursday, Elexon data showed, reducing demand for gas in power generation.

* Wind speeds are forecast to dip below normal over the weekend before rising again and peaking on July 9, Refinitiv analysts added.

* Supply from Norway and liquefied natural gas (LNG) send-out also fell but the reduction was not enough to prevent gas system from being oversupplied.

* Unlike other prompt contracts, the day-ahead price edged up by 0.10 p to 14.25 p/therm.

* A trader said the rise in the day-ahead was a correction from the previous day’s strong drop in price.

* The UK August contract was down 0.37 p at 15.03 p/therm.

* The trader added that the curve is being impacted by the French EDF’s announcement that it had revised upward its nuclear output estimate in France in 2020.

* A drop in oil and carbon prices was also impacting longer-term gas contracts.

* The Dutch TTF day-ahead price was 0.12 euro higher at 5.30 euros per megawatt hour.

* The benchmark Dec-20 EU carbon contract was down 0.35 euro at 27.02 euros per tonne. (Reporting By Ekaterina Kravtsova; editing by Nina Chestney)

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