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LONDON (Reuters) – Prompt British gas prices fell sharply on Monday as a forecast for mild weather and a dip in demand led to an oversupplied market while lower oil prices weighed on contracts along the curve.
Gas for immediate delivery was down 1.75 pence or 5.8 percent at 28.60 pence per therm at 0911 GMT. (TRGBNBPWKD)
The day-ahead contract (TRGBNBPD1) was down 0.63 pence to 28.90 pence per therm. (TRGBNBPD1)
Britain’s gas system was oversupplied by 14.9 million cubic metres (mcm), with demand forecast at 269.9 mcm and supply at 284.8 mcm, National Grid data showed.
“The warmer weather in the South East has helped alleviate some heating pressure demand and forecast demand is now lower,” said Nick Campbell, risk manager at Inspired Energy.
“Norwegian imports via the Langeled pipeline are close to technical capacity and flows via South Hook have also increased reducing system tightness seen over the previous week,” he said.
Britain’s Met Office forecast temperatures would reach around 12 to 13 degrees Celsius in the south of the country on Monday, higher than average for the time of year.
Imports from Norway through the Langeled pipeline were near full capacity around 70 mcm on Monday morning, National Grid data showed, up from levels below 40 mcm overnight.
Further along the curve prices were dragged lower by the weak prompt prices and a fall in oil.
The Summer 16 contract fell 0.55 pence to 27.05 pence per therm
Benchmark Brent crude oil futures fell 1 percent on Monday (LCOc1) morning on concerns over a supply glut after the U.S rig count rose for the first time since December. [O/R]
In the Netherlands, the day-ahead gas price at the TTF hub fell 0.2 euros to 12.08 euros per megawatt-hour.(TRNLTTFD1)
In the European carbon market, front-year allowances were down 0.04 euros to 4.91 euros a tonne. (CFI2Zc1)
(Reporting by Susanna Twidale; editing by Susan Thomas)
