Sunday, December 10

UK prompt prices rise on lower wind, undersupply

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British prompt wholesale gas prices rose on Friday morning as exports resumed through the InterconnectorUK pipeline from Britain to Belgium, lower wind output and ahead of an liquefied natural gas (LNG) terminal outage next week.

The British day-ahead contract rose by 53.00 pence to 310.00 pence per therm, while gas for immediate delivery was up by 47.00 pence to 305.00 pence per therm by 0843 GMT.

The UK system was under-supplied by around 17.4 million cubic meters (mcm) on Friday morning, with demand expected to be at well above seasonal norm, National Grid data showed.

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The return of exports via the Interconnector pipeline, as well as expected stronger demand for gas to generate power, were pushing prices up, said Marina Tsygankova, gas analyst at Refinitiv.

The Dragon liquefied natural gas (LNG) terminal will also undergo maintenance next week from Aug. 8-10, which will limit LNG send-out.

Wind power output has fallen, boosting gas-for-power demand, with peak wind generation forecasted at 4.1 gigawatts (GW) on Saturday, down from 4.7 GW on Friday, compared to a total metered capacity of nearly 20 GW, Elexon data showed.

In the Dutch market, gas prices for the weekend also rose by 7.00 euros to 200.50 euros per megawatt-hour (MWh), while contract for October delivery was up by 4.90 euros to 200.60 euros per MWh.

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Russian gas flows have remained reduced, amid a stand-off over the return of a repaired turbine for Nord Stream 1 from Germany to Russia continuing.

Russia’s gas exporter Gazprom said only one of six main turbines of Nord Stream 1 pipeline were operating, blaming western sanctions for causing technical problems.

Despite the reduced flows from Russia, European countries are on track to reach a gas storage filling target by the start of this winter, but it could cost tenfold of historical average.

In the European carbon market, the benchmark contract edged up by 0.62 euro to 84.81 euros a tonne.

(Reporting by Nerijus Adomaitis, editing by Nina Chestney)