Mild weather has forced down UK gas prices as demand drops and lower European exports boost supply.
According to Reuters, UK day-ahead gas dropped by 0.85 pence to 59.65 pence per therm due to an oversupplied system and added deliveries from North Sea fields, fuelling downward momentum.
“The market is grinding down on poor demand,” one trader from a major UK utility said.
But market analysts at Point Carbon expect current bearish sentiment to be more than offset by reduced LNG flows and higher oil prices later in the trading day, anticipating a recovery to between 60.1 pence and 60.9 pence on the day-ahead contract.
The UK’s Theddlethorpe gas terminal, operated by ConocoPhillips, has resumed flowing gas into the UK transmission system following an unplanned outage that cut flows on Tuesday afternoon.
The gas market was oversupplied by 4 million cubic metres/day, sending gas for immediate delivery 1.15 pence lower at 59.7 pence, thanks to increased imports from Norway and greater contributions from offshore fields.
Falling demand in mainland Europe led to reduced exports via a sub-sea link between Britain and Belgium, further boosting availability of gas and keeping a lid on prices.