Prices fall on rising wind power, milder temperatures

LONDON, Jan 24 (Reuters) - British and Dutch wholesale gas prices edged lower on Tuesday as forecasts for milder temperatures and increased wind power output curbed demand.

The British within-day contract fell by 23.50 pence to 155.00 p/therm by 1030 GMT while the day-ahead contract was down 20.00 pence at 154.00 p/therm, according to Refinitiv Eikon data.

Peak wind power output in Britain is forecast at 7.4 gigawatts (GW) on Tuesday rising to 12.5 GW on Wednesday, Elexon data showed.

Meanwhile, local distribution zone demand, which is primarily used for heating, was forecast at 227 million cubic meters (mcm) on Tuesday and 210 mcm on Wednesday, Refinitiv Eikon data showed.

The forecasts were 9 mcm and 17 mcm lower respectively than previous expectations.

Britain’s National Grid paid customers to use less electricity on Monday the first time it has used a new scheme designed to help prevent power shortages.

The so-called demand flexibility service is also in place for Tuesday afternoon but National Grid stood down coal units that had previously been on standby for Tuesday.

The benchmark the front-month contract at the Dutch TTF hub was down by 7.95 euros at 58.95 euros per megawatt hour (MWh) according to Refinitiv Eikon data.

Healthy storage levels have weighed on European gas prices in recent weeks and were almost 78% full, latest data from Gas Infrastructure Europe showed.

Traders said news of progress in opening the Freeport LNG facility in the United States was also bearish for prices.

Freeport LNG, the second-largest U.S. liquefied natural gas exporter, on Monday said it had completed repairs to its Texas plant and asked U.S. regulators for permission to take early steps to restart the fire-idled facility.

“The prospect (of a restart) is certainly getting the TTF animated,” Tom Marzec-Manser, head of gas analytics at ICIS, said on Twitter.

In the European carbon market, the benchmark contract was down by 1.52 euros at 83.67 euros a tonne.