Prices decline due to oversupply
LONDON (Reuters) - British wholesale gas prices declined on Thursday morning due to oversupply, a day ahead of the new summer gas season which usually sees lower demand due to warmer temperatures.
Gas for immediate delivery was down 0.20 pence per therm at 28.60 p/therm at 0803 GMT, while gas for April delivery was also down 0.20 p at 29.05 p/therm.
The system was oversupplied on Thursday morning by 22 million cubic metres (mcm) of gas. Demand was forecast to be 269.8 mcm and flows were expected to be 291.8 mcm/day, National Grid data shows.
Traders said weaker demand over the coming weeks, coupled with strong supply and LNG arrivals, has put pressure on prices.
Flows from the UK Continental Shelf are high at 149 mcm/day and flows from Norway through the Langeled pipeline are at 67 mcm/day. Liquefied natural gas supply was also strong with three tankers due in Britain over the next week.
The summer gas season is due to begin on April 1 which will run until October. This is typically a period of lower demand for gas due to warmer temperatures and when gas is injected into storage.
"Today is the last day of the gas winter (season) and could see volatile trading as positions are closed and nominations become available later in the trading day," said Thomson Reuters gas analyst Dimitrios Saratzis.
Dutch day-ahead gas prices at the TTF hub inched down by 0.05 euros to 12.05 euros/MWh. In the European carbon market, benchmark EU allowances eased by 0.05 euros to 4.92 euros a tonne.
(Reporting by Nina Chestney)
