LONDON: Wholesale natural gas prices in Britain fell on Monday morning due to oversupply in the market as exports to the continent were reduced and liquefied natural gas (LNG) supply was expected to increase.
Gas prices for delivery on Tuesday declined to 38.75 pence ($0.66) per therm at 0834 GMT, 1.65 pence lower than the previous close, while gas for immediate delivery was down 2.55 pence at 38.35 pence per therm.
Prices for the winter 2014-2015 season were down 1.52 pence at 59.48 pence per therm.
National Grid data showed that flows were forecast to be around 190 million cubic metres a day on Monday, some 14 mcm above forecast demand of around 176 mcm.
The Interconnector (IUK) pipeline, which exports gas to continental Europe, was expected to export around 28 mcm on Monday, down from a high of 43 mcm on Friday, which was the largest volume since the end of June 2013.
Five liquefied natural gas (LNG) tankers also were due to arrive in Britain by Aug. 4.
Due to healthy supply levels, around 39 mcm/day of gas was injection into storage over the weekend.
"Going forward, the surge in LNG could drive down prices and support an increase in IUK exports to around 32 mcm," analysts at Thomson Reuters Point Carbon said.
"However, from Friday and into next week we expect a drop in exports as the supply scenario in the UK tightens due to Troll maintenance and then a cut in UKCS production due to Forties and CATS maintenance," they added.
Planned maintenance during the first two weeks of August is expected to hit UK Continental Shelf production, and people expect more injections into storage leading up to that.
In Britain's power market, day-ahead British baseload (24 hours) power was down 0.25 pounds at 35.90 pounds per megawatt hour.
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