October 13, 2016 / 10:12 AM / 4 years ago

UK GAS-Prices inch up on undersupply

* System undersupplied by around 6 mcm

* UKCS flows decline

LONDON, Oct 13 (Reuters) - British wholesale gas prices rose slightly on Thursday due to undersupply and expectations of lower temperatures.

Gas for immediate delivery inched up by 0.05 pence to 42.15 pence per therm by 1001 GMT from the previous settlement. Gas for day-ahead delivery was 0.20 pence higher at 42.10 pence per therm.

“Prompt prices have opened the session higher, finding support from tight supplies intra-day and forecasts of lower temperatures for the coming weeks,” said Andrew Crabtree, pricing and risk analyst at Wingas UK Limited.

Britain’s gas system was around 6 million cubic metres (mcm) undersupplied, with demand forecast at 230.8 mcm and flows at 224.6 mcm per day, National Grid data showed.

Deliveries from the UK Continental Shelf were at 143 mcm/d, down from 148 mcm/d in the previous session. Flows from the Netherlands were also slightly lower than on Wednesday.

However, flows from Norway through the Langeled pipeline are 10 mcm higher than average flows on Wednesday.

Slightly milder temperatures are expected in Britain by the weekend and peak wind generation is forecast to fall to 4,335 megawatts on Friday from 5,357 MW on Thursday. However, temperatures are expected to fall again next week.

In the Netherlands, the day-ahead gas price at the TTS hub was up 0.17 euro at 15.52 euros per megawatt-hour.

In the European carbon market, the benchmark Dec. 16 contract rose by 0.09 euro to 5.61 euros a tonne.

Members of the European Parliament’s industry committee voted on Thursday in favour of a compromise for reforming the European Union’s carbon market, favouring a Commission proposal for the rate at which permits should be removed. (Reporting by Nina Chestney, editing by David Evans)

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