EUROPE GAS: U.K. Contracts Decline as Warmer Weather Forecast

Contracts in U.K., Europe’s most traded mkt, decline as a period of colder weather is set to end later this wk.

  • Day-ahead price declines 0.7% on NBP hub to 43.6 p/therm by 3:31pm in London: broker data
  • Within-day gas falls 0.3% to 43.65 p/therm : broker data
  • “Temperatures in the U.K. are expected to trend at 2C or 3C below average today, before rising to 0 or 1C midweek. Temperatures are then expected to rise slightly to 0 or 1C above average either side of the week”: MetraWeather in e-mailed note
  • U.K. system undersupplied: National Grid
  • Next-month contract declines 0.3% to 41.75 p/therm on ICE Futures Europe; winter price drops 0.6% to 47.85 p/therm
  • Dutch gas for July falls 0.6% on TTF hub to EU20.18/MWh; day-ahead contract on NetConnect Germany weakens 0.4% to EU20.68/MWh: broker data
  • DEMAND AND FLOWS
    • Closing linepack 339.4 mcm vs opening 342.4 mcm: National Grid data at 3:03pm London time
    • U.K. industrial, commercial, residential gas consumption for Monday fcast at 94 mcm/d before dropping to 87 mcm/d Tuesday, 75 mcm/d Wednesday: Bloomberg model
    • Demand including exports, power generation fcast at 195 mcm Monday vs seasonal norm 170 mcm: National Grid
    • Additional annual maintenance at gas facilities starts this wk
    • Total flows into U.K. at 188 mcm/d vs 10-day avg 205 mcm/d: grid data
    • Norwegian flows to U.K. at 51 mcm/d vs 10-day avg 45 mcm/d: Gassco data
    • LNG send-outs at 31 mcm/d vs 10-day avg 52 mcm/d: grid
    • U.K. exports to Belgium nominated at 24.3 mcm/d, compares w/ 33.5 mcm/d Friday: Interconnector
  • WEATHER
  • Temperatures in U.K. fcast at 11.5C for rest of Monday vs 10-yr avg 14.9C: WSI data using GFS model at 10:23am London time.
  • OUTAGES
    • Gassco says annual maintenance at unspecified field to cut flows by 65 mcm/d May 19-June 28
    • Works to cut power usage at Ormen Lange gas processing plant May 19-June 27: Shell
    • Gassco says Kollsnes plant to have yearly maintenance May 30-June 9
    • Gassco’s Zeebrugge terminal annual maintenance June 1-8
    • Conoco’s J-Block to have scheduled maintenance June 1-24
    • Teesside Gas Processing Plant to have annual maintenance June 1-2; June 2-23; June 23-24
    • SSE’s U.K. Aldbrough Gas Storage Has Partial Outage to June 15
    • SSE Extends Aldbrough U.K. Gas Deliverability Outage to June 3
    • Energystock Plans Dutch Gas Site Maintenance June 1-18

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