LONDON: Spot wholesale natural gas prices in Britain dipped for a second day on Wednesday as an oversupplied system and the prospect of more gas arriving via sea weighed on the market.
Day-ahead NBP gas was down 0.5 percent at 36.50 pence/therm by 0833 GMT, approaching the four-year low of 34.40 pence hit last Friday.
"Most of the drivers for today are either sideways bearish or sideways bullish," said analysts at Thomson Reuters Point Carbon.
On the bearish side, Britain's gas system was poised to be overstocked by around 6 million cubic metres on Wednesday, according to the National Grid.
The analysts said a slightly higher-than-expected sendout of liquefied natural gas from storage terminals across Britain could also knock prices.
An LNG cargo of 213,000 cubic metres arrived in Britain on Tuesday, while another for 206,000 cubic metres is expected to dock Wednesday.
A further 474,000 cubic metres of LNG is scheduled to arrive by July 23, according to Thomson Reuters data.
"On the slightly bullish side, we expect gas-fired power generation to edge upward tomorrow, and there is continued risk around BBL imports," the analysts said, referring to a pipeline that transports gas to Britain from the Netherlands.
"However, assuming that BBL stays close to the nominated level of 8 mcm, the direction is more likely to be sideways bearish than bullish."
London-based analysts Energy aspects said that Russian gas imports into Western Europe have been maintained at around last year's levels despite a significant reduction in demand.
"Q3 demand, particularly for gas to inject into storage, is going to be even lower than Q2 demand, so continued high levels of Russian gas supply holds further downside price risks," they added in an emailed note, cutting their third quarter price forecast to 36.5 pence/therm from 38 pence.
Energy Aspects also cut its fourth quarter price view to 55 pence from 58 pence, but warned that if November and December deliver unseasonably cold weather in Western Europe, then there is "considerable upside risk for prices", with the impacts likely to be felt in the Q1 contract.
British day-ahead baseload power rose by 35 pence or 1 percent to 35.60 pounds per megawatt-hour.
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