UK GAS-Prompt prices fall on expected increase in supply

Reuters - UK Focus

* Imports from Norway expected to ramp up on Weds

* Teesside gas terminal output up after outage ends

* Gas system undersupplied by 9 mcm

Oct (HKSE: 3366-OL.HK - news) 20 (Reuters) - British prompt gas prices fell on Tuesday on expectations that system tightness will ease with Norwegian deliveries and wind power output rising the next day.

Gas for within day delivery was at 41.40 pence per therm at 0815 GMT, down 0.10 pence since their last settlement.

Gas for delivery on Wednesday was down 0.60 pence at 40.85 pence per therm.

With supply at about 206 million cubic metres (mcm) per day on Tuesday and demand expected to be about 215 mcm, the system was 9 mcm undersupplied, National Grid (LSE: NG.L - news) data showed.

Norwegian imports fell further on Tuesday as the impact from gas field maintenance widened to 52 mcm/day from 30 mcm/day on Monday, but the outage was expected to end by Wednesday.

"Langeled flows should pick up toward 45 mcm tomorrow as maintenance on the Norwegian continental shelf eases," said Oliver Sanderson, an analyst at Thomson Reuters Point Carbon.

"That will ease the market tightness," he said.

In addition, wind power peak output is expected to rise 5,087 MW on Wednesday from a maximum of 3,227 MW on Tuesday, reducing demand for gas-fired power generation.

Domestic gas supply rose on Tuesday after an unexpected outage at TGPP's Teesside gas terminal ended by Tuesday.

Flows through Teesside were back to 8 mcm by Tuesday morning after dropping to 2 mcm on Sunday.

This was partly offset by gas deliveries from the Dragon terminal dropping to zero from 3 mcm/day the previous day, resulting in LNG supplies easing to 47 mcm/day.

Three LNG cargoes from Qatar are scheduled to arrive to the South Hook terminal on Oct. 25-27.

Gas prices for November delivery were broadly steady at 40.80 pence per therm, while the first-quarter contract eased by 0.17 pence to 41.83 pence per therm.

Oil prices steadied on Tuesday after falling by $1.85 a barrel, or 3.7 percent, on Monday.

In the Netherlands, the day-ahead gas price at the TTF hub were down 0.27 euros at 18.48 euros per megawatt-hour (MWh).

In Europe's carbon market the front-year EU Allowance (EUA) price eased 0.02 euros to 8.33 euros per tonne.

(Reporting by Nerijus Adomaitis in Oslo; editing by Jason Neely)