British wholesale gas prices continued to climb on Thursday as British production outages balanced stronger Norwegian gas flows while concerns lingered over winter supply.
The within-day contract TRGBNBPWKD was up 1.9 pence at 138.5 pence per therm by 0857 GMT.
The day-ahead contract TRGBNBPD1 was up 1 pence at 138 p/therm
Norwegian gas flows through the Langeled pipeline were up 5 million cubic meters (mcm) per day, but UK domestic production was 9 mcm/day down because of unplanned outages, Refinitiv analyst Xun Peng said in a morning report.
Britain’s gas system was forecast to be 7 mcm/day under-supplied on Thursday morning, with demand forecast at 135 mcm/day and supply at 128 mcm/day, National Grid data showed.
Peak wind power generation was expected to drop to 2.6 gigawatts (GW) on Friday from 4.2 GW on Thursday, out of a total metered capacity of nearly 20 GW, Elexon data showed.
Low wind power output typically increases demand for gas from power plants.
Concern over supply for the coming winter remained the key bullish market driver, Peng said.
The winter contract TRGBNBPSH2 was up by 1.52 pence at 143.25 p/therm.
The inventory of storage in northwest Europe controlled by Russian producer Gazprom stood at 28 terawatt hours (TWh), or just 23% full, “overwhelmingly” lower than in 2019 and 2020, Peng said.
This compared with Non-Gazprom storage of 312 TWh, or 78% full. That is on a par with 2018 but roughly 77 TWh lower than 2020 and 2019.
There was also a risk that flows of Russian gas via the Polish-German border point of Mallnow could drop close to zero from Oct. 1, the start of the 2021 gas year, if no long-term capacity is booked at a Sept. 20 auction, Peng said.
The October gas price at the Dutch TTF hub TRNLTTFMc1 rose by 0.47 euros to 55.60 euros per megawatt hour (MWh) after touching a record high of 55.88 euros/MWh.
“Prices keep on climbing but the balance doesn’t improve, so it’s hard to see an end to it,” one trader said.
The benchmark Dec-21 EU carbon contract CFI2Zc1 was down 0.35 euros at 62.10 euros a tonne.
The benchmark Dec-21 British carbon contract UKAFMc1 was down 0.21 pounds at 53.50 pounds a tonne.
Source: Reuters (Reporting by Nora Buli Editing by David Goodman)