UK GAS-Prompt prices drop on high imports

UK GAS-Prompt prices drop on high imports

Prompt British gas prices fell as much as 12 percent on Monday morning as an increase in imports from Norway, looming liquefied natural gas (LNG) supply and warm weather weighed on the market.

Gas for immediate delivery fell 2.8 pence to 21.00 pence per therm by 0849 GMT, with gas for day-ahead delivery down 0.75 pence at 22.75 pence/therm.

Britain’s gas system was oversupplied by 49.5 million cubic metres (mcm) per day, with demand forecast at 185.4 mcm and supply at 234.9 mcm, National Grid data showed.

“Strong supplies intra-day together with mild conditions expected over the coming weeks have seen prompt contracts open the session lower,” said Wingas UK’s head of trading Marcel Boonaert.

Imports from Norway through the Langeled pipeline were close to 30 mcm, up from around 10 mcm the previous day.

Meanwhile Britain’s Met Office said temperatures could hit 32 degrees Celsius in the south of the country on Tuesday, compared with normal average September temperatures around 16 degrees.

Traders said expectations of fresh supplies of LNG over the coming days had also put pressure on prices.

The Lijmiliya liquefied natural gas (LNG) tanker arrived in Britain at the weekend, with three more LNG tankers expected to bring additional supply over the next nine days.

Gas prices further out on the curve also fell.

The Winter 16 contract slipped 0.36 pence to 37.44 p/therm, while the Q1 2017 contract fell 39.85 to 0.25 p/therm.

Centrica on Friday said it would retire one of its offshore platforms at its Rough natural gas storage site in Britain.

It said the move would not impact capacity and also confirmed it expected to have 20 wells available for gas withdrawal at Rough from Nov. 1 as planned as part of maintenance at the site.

In the Netherlands, the day-ahead gas price at the TTF hub was down 0.58 euro at 10.57 euros per megawatt-hour.

In the European carbon market, the benchmark Dec. 16 contract slipped 0.06 euro to 4.02 euros a tonne.

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