UK wholesale spot gas prices increased today as a result of a major outage at the Kollsnes processing facility.
Wholesale gas prices have climbed higher due to restrictions on Norwegian capacity, caused by the outage at the Kollsnes platform. However, the rest of the gas curve has moved in contrast to spot prices and decreased; contracts fell on the back of weaker demand and comfortable supply for the time being.
The UK within-day price for gas increased by 0.70ppt to trade at 38.95ppt as of 8.59am GMT, while the Day-Ahead contract fell to 37ppt.
Gas grid operators, Gassco announced that the outage at Kollsnes has cut Norwegian production capacity by 51mcm/ day.
Despite this restriction, overall gas supply is healthy following a rise in UKCS production, scheduled storage withdrawals, reduced gas-fired power and lower exports to Europe. As a result, the UK gas system was 5.3mcm long.
According to National Grid data, gas demand stands at 164mcm and the supply forecast is 169.3mcm/ day.
Flows via the St Fergus Mobil terminal rose to around 14mcm/ day following issues which limited output in the previous session. There was also an increase in flows at Bacton Seal which recovered from Tuesday’s outage. +
Gas-fired power demand is forecast 4mcm lower today and tomorrow due to an improvement in wind generation.
Exports to Belgium via the IUK pipeline are down to 45mcm/day but this is expected to ramp up tomorrow as price spreads between the UK and European markets widen.
Meanwhile, withdrawals of around 3mcm/day have been scheduled at mid-range storage sites.