Prompt prices slip as supply outpaces demand
By Susanna Twidale
LONDON (Reuters) – British prompt gas prices fell on Tuesday as forecasts for high wind power output curbed demand and gas imports from Europe remained strong.
Gas for instant delivery fell by 0.12 pence per therm to 27.30 p/therm by 0813 GMT, while the day-ahead contract fell by 0.20 pence to 27.65 p/therm.
With gas supply flows at about 261.2 million cubic metres (mcm) and demand expected to be about 245.4 mcm, Britain’s gas system was 15.8 mcm oversupplied, National Grid data showed.
Traders said ample supplies from Europe led to an oversupplied system on Tuesday while forecasts of high output from the Britain’s wind farms on Wednesday had tempered expectations for forward gas demand, causing prices to dip.
Imports of gas from Norway through the Langeled pipeline were around 60 mcm/day on Tuesday, National Grid data showed.
Supplies from the Netherlands through the BBL pipeline were around 14 mcm/day, up from levels near 12 mcm on Monday.
Peak wind power output is expected to reach 6.5 gigawatts (GW) on Wednesday, National Grid data showed, up from 3 (GW) on Tuesday.
Further along the curve, the British winter 2016 gas contract fell 0.25 pence to 32.00 p/therm.
In the Dutch gas market, day-ahead prices at the TTF hub slipped 0.13 euros to 11.27 euros per megawatt-hour.
In the European carbon market, front-year allowances edged down 0.07 euros to 5.26 euros a tonne.
(Reporting by Susanna Twidale)