Uk Gas Prices

UK GAS: Prompt gains slightly on short system, curve moves up

UK gas prices rose slightly on the prompt Monday, with the network looking short of gas, although with no great concern in the market.

Overall the prompt remains stuck in its range of recent weeks, just under 60 pence/therm.

On the forward curve the seasons were also showing gains Monday from last week's closing levels.

At around midday UK time Monday the UK within-day was at 59.55 pence/therm and the day-ahead at 59.50 p/th, compared with a day-ahead closing level last Friday slightly lower at 59.10 p/th.

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National Grid, the UK gas system operator, showed supply for the day forecast at 194 million cubic meters, making the network 16 million cu m short against expected demand of 210 million cu m.

Recent cooler, gloomier weather in the UK had helped push heating demand up a bit, said one trader, but the weather would be moving more back to normal by Tuesday/Wednesday, possibly taking away that extra heating load.

Across all parts of the demand mix, the total demand is in any case relatively low, below National Grid's estimate for the seasonal norm, which would be 248 million cu m. Total demand includes not just heating, but industry, power stations and exports.

Norway's Oseberg field was expected to complete its return from maintenance over the weekend, having been off since mid-May, according to a trader last week.

Operator Statoil confirmed last week the Oseberg field was returning.

But Norwegian gas flows to the UK were still fairly low Monday, with the Langeled line at around 9 million cu m/day rates.

St Fergus Total, which receives Norwegian gas through Vesterled, was also at low rates, and has been at zero for parts of the last 24 hours.

Centrica was still keeping its Morecambe Bay gas fields off, despite them now believed to be commercially available. Centrica has said it may keep them offline if it is cheaper to buy spot gas instead.

South Hook LNG was still at fairly high rates, flowing at around 40 million cu m/day. The UK's Dragon and Grain LNG terminals were flowing, but not at very high rates.

The Zarga is due at South Hook June 14, the Rasheeda June 16 and the Mesaimeer June 19, all from Qatar. The Middle East LNG producer has been keeping up a steady flow of cargoes to the UK for months.

UK Gas Slips on Low Demand, Strong LNG Supply >> LNG World News

British wholesale gas prices slipped on Monday as gas demand fell to the lowest level in nine months, but a short compressor problem at Norway’s Kollsnes gas processing plant briefly supported within-day prices.

British gas demand dropped to around 208 million cubic metres on Monday morning, the lowest level since September and 17 percent below seasonal norms, as traders said gas buying for injections into storage sites was low.

But within-day gas prices traded up briefly as Gassco’s North Sea plant Kollsnes experienced a short problem with some of its compressors.

Within-day gas prices traded up 0.20 pence from the previous session to 58.95 pence per therm at 1000 GMT, 0.70 pence higher than earlier on Monday.

“ The prompt has pushed up very slightly but not much impact ,” one UK gas trader said about the Kollsnes problems. Bearish sentiment prevailed due to an oversupplied market amid low demand and pushed day-ahead gas prices 0.15 pence lower to 58.75 pence.