LONDON (Reuters) - British prompt gas prices slid 15 percent on Tuesday to a two-week low as flows from North Sea pipelines and stocks of liquefied natural (LNG) gas at terminals rose sharply, although cold weather was expected to drive demand until next week.
Prompt gas for within-day delivery was trading at 77.00 pence a therm at 0740 GMT, down 13.40 pence from the previous day’s trading on Thursday, before the Easter holidays.
Gas for Wednesday delivery traded at 79 pence, down 14.50 on Thursday’s close.
“The system is very long this morning because of a big rise in LNG deliveries, healthy flows from Norway, while along the curve, prices are weakening as forecasts suggest Britain will start to see milder weather next week,” said one trader.
Forecast supply of gas at 347 mcm outpaces expected demand by 28 mcm, National Grid data showed, driving within-day gas prices to their lowest since March 15.
Three deliveries from Qatar and another from Trinidad have helped replenish stocks after the coldest March in half a century, while Norwegian deliveries to Britain are expected to be 134 mcm on Tuesday, up from Thursday’s average of 119 mcm, according to National Grid data.
The four deliveries of super-cooled gas have swelled Britain’s stocks of LNG held at import terminals to 7,599 gigawatt hours (GWh) on Monday, or around 660 million cubic metres (mcm) of gas, up from 358 mcm on March 24.
LNG terminals are expected to pump 26 mcm of gas into Britain’s distribution network on Tuesday after supply hit 30 mcm on Monday, up sharply from 14 mcm on Thursday, analysts at Reuters Point Carbon said in a daily report.
In addition, Britain’s stocks of natural gas in storage rose slightly to 2,847 GWh (about 247 mcm) on Monday from just 2,594 GWh on Saturday, as plentiful supplies of pipeline gas allowed some refilling of mid-range storage, according to the latest data from National Grid.
Gas storage sites topped up their meagre supplies by 29 mcm or 0.6 percent by late Monday, according to figures published by Gas Storage Europe, leaving total stocks at just 5.7 percent of capacity.
Demand for gas is expected to remain high this week as Britain continues to shiver in unseasonably cold temperatures.
Forecasters GFS said that temperatures would return to seasonal norms from the middle of next week, although this week many areas are expected to remain close to freezing.
Reporting By John McGarrity and Daniel Fineren; editing by Alison Birrane and Keiron Henderson