LONDON, July 11: British prompt gas prices extended falls on Wednesday morning as liquefied natural gas (LNG) terminals boosted output ahead of fresh shipments and utility Centrica prepared to bring back its South Morecambe gas field from maintenance.
Gas for Thursday delivery fell 0.30 pence to 56.50 pence a therm as North Sea production rose and withdrawals from mid-range storage sites stepped up a gear, on top of greater imports from the Netherlands.
Weekend gas dropped 0.75 pence to 55.55 pence, pulled lower by similar drivers.
‘The system is more comfortable today so prices are coming off a bit more following yesterday’s sell-off,’ a trader from a European utility said.
Gas prices plunged 7 percent on Tuesday after a last-minute move the previous day by the Norwegian government to prevent a lockout of striking offshore workers that could have shut down the country’s entire oil and gas production.
Gas for immediate delivery bucked the downward trend, rising slightly to 56.25 pence, up 0.15 pence on the day after the transmission network was undersupplied earlier in the morning.
Imports via the Dutch BBL pipeline rose to just shy of 10 million cubic meters/day, while mid-range storage sites pumped out at similar rates.
Both LNG terminals at Milford Haven – South Hook and Dragon – in Wales were outputting gas into the transmission system. Dragon expected to receive a delivery on Sunday.
Point Carbon analysts forecast day-ahead gas prices to trade little changed during the day with Thursday’s demand expected to be stable.
Centrica extended maintenance work at its South Morecambe gas field by one day to Tuesday, although the field was still not outputting on Wednesday.
August and September gas prices also fell, in line with the bearish prompt and an outlook for higher supply of liquefied natural gas (LNG) as Asian LNG prices have fallen from highs seen over the past months, making it again more attractive for suppliers to send spot cargoes to Europe.
Nigeria has sent its LNG Port Harcourt tanker to the Dutch Gate terminal, where it is expected to arrive on Wednesday.
August gas prices fell 0.40 pence to 55.15 pence, while September traded at 56.16 pence, down 0.23 pence.
Benchmark front-season gas was little changed at 64.10 pence.
British day-ahead power prices rebounded on Wednesday after shedding more than 3 pounds in the previous session, bouncing back up to 43.50 pounds per megawatt hour (MWh), up 1.50 pounds day on day.
Power production from wind and gas plants increased on Wednesday as nuclear output declined.
(AGENCIES)
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