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UK GAS-Prices edge up as Norway gas re-routed to Europe

Saturday, 20 July 2019 | 00:00

British wholesale gas prices were slightly higher on Friday as Norwegian gas was re-routed to continental Europe.

* Day-ahead gas was 0.15 pence higher at 29.25 pence per therm at 0734 GMT.

* Gas for weekend delivery was up 0.20 pence at 29.00 p/therm.

* Flows from Norway through the Langeled pipeline have decreased to 37 mcm/day from 47 mcm on Thursday as supply is rerouted to continental Europe.

* However, there is higher domestic production which has helped balance the system. This could fall from August as a number of outages are scheduled.

* The system is balanced with demand forecast at around 168 million cubic metres (mcm) and flows at 168 mcm/day, according to National Grid data.

* Peak wind generation is forecast at 6.7 gigawatts (GW) and 6.4 GW on Saturday, Elexon data shows. This is over half of the total metered capacity of 12 GW.

* Strong wind is forecast for Monday which should curb gas for power demand.

* The first two weeks of July have seen higher gas prices due to outages but Europe still has a large gas storage surplus.

* “Our forecast indicates that Europe will head into the last weekend of July with a 21.8 bcm y/y storage surplus, leaving August and September with an enormous balancing task,” said consultancy Energy Aspects.

* There have been several reloads of liquefied natural gas (LNG) this month from Europe as market players take advantage of cross-basin seasonal spreads but send-out has been needed to clear space for incoming cargoes because LNG stocks are still high, it added.

* Storage is expected to fill by early September due to higher gas demand so prices are likely to fall in the coming weeks.

* In the Dutch gas market, the front-month contract edged up by 0.07 euro to 10.75 euros per megawatt hour.

* Benchmark Dec-19 EU carbon contract was 0.19 euro higher at 27.97 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)

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