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UK GAS-Prices edge higher on expected colder weather

Thursday, 31 December 2020 | 01:00

British wholesale gas prices rose on Wednesday morning, with already cold temperatures poised to dip further and increase demand for gas for heating.

* The day-ahead contract was up 0.8 pence at 57.50 p/therm by 1005 GMT.

* The drop in temperatures also combined with lower supplies from the country’s liquefied natural gas (LNG) terminals, leaving the market undersupplied.

* Britain’s gas demand was forecast at 340.8 million cubic metres (mcm) and supply forecast at 336.2 mcm/day, National Grid data showed.

* Average temperatures in Britain were forecast at 0.9 degrees Celsius on Wednesday, falling to -0.1C on Thursday, Refinitiv Eikon data showed.

* The forecasts were 1C and 1.2C respectively lower than previous expectations.

* Refinitiv analysts forecast local distribution zone gas demand, which is primarily used for heating, at 276 mcm for Wednesday and 289 mcm for Thursday, up 10 mcm and 15 mcm respectively on previous forecasts.

* Flows from Britain’s LNG terminals were expected at 37 mcm, down from 47 mcm the previous day, Refinitiv data showed.

* Further out on the curve prices also rose.

* The January contract was up 1.79 pence at 57 p/therm.

* The March contract was up 5.65 pence at 53 p/therm.

* The day-ahead gas price at the Dutch TTF hub was up 0.38 euros at 19.43 per megawatt hour.

* The benchmark Dec-21 EU carbon contract was up 0.25 euros at 33.27 euros a tonne.
Source: Reuters (Reporting by Susanna Twidalen Editing by David Goodman)

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