UK gas prices mixed amid oversupply and lower wind power forecasts

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BRITISH wholesale gas prices were mixed on Monday morning as oversupply weighed on the within-day contract and forecasts for lower wind power buoyed the day-ahead, Reuters reported.

  • The within-day contract was down 0.35 pence at 16.25 p/therm by 0926 GMT.
  • The day-ahead contract was up 0.25 p at 16.25 p/therm.
  • Traders said fundamentally the market remains week amid low demand and plentiful supply but the day-ahead price was lifted on expectations of stronger demand from power plants and lower output from wind farms.
  • Britain’s gas system was oversupplied by 8.8 million cubic metres (mcm) with demand forecast at 195.9 mcm and flows at204.7 mcm/day, National Grid data showed.
  • Peak wind power generation is forecast at 14 gigawatts (GW) on Monday, falling to 7.6 GW on Tuesday, Elexon data showed.
  • “Gas for power day-ahead forecast is at 42 mcm/day up by 12mcm/d from previous forecast,” analysts at Refinitiv said in a daily research note.
  •  Further out on the curve prices were also mixed.
  • The May contract was up 0.38p at 16.40p/therm.
  • The June contract was down 0.40 p at 17.00 p/therm.
  • Traders said signals for curve prices were weak given a dip in oil prices.
  • Oil fell on Monday, after Saudi Arabia and Russia delayed a meeting to discuss output cuts that could help alleviate global oversupply as the coronavirus pandemic pummels demand.
  • The day-ahead gas price at the Dutch TTF hub was down 0.15 euro at 6.90 euros per megawatt hour.
  • The benchmark Dec-20 EU carbon contract was up 0.82 euro at 18.75 euros per tonne.