LONDON: British wholesale gas prices were little changed on Thursday due to balanced supply-demand fundamentals and as fears surrounding reduced Russian gas exports to Poland and Germany receded.
The day-ahead contract lost 0.25 pence or 0.5 percent to 46.00 pence/therm by 0845 GMT, hit by falling crude oil and a firmer pound.
Prices for delivery over the winter 2014/2015 season added 0.25 pence or 0.4 percent at 60.00 pence/therm. Britain's gas demand was expected to be 164.9 million cubic metres (mcm) on Thursday, around 2.3 mcm above forecast supply, according to National Grid data.
Analysts at Thomson Reuters Point Carbon said this was due to reduced Norwegian flows caused by a drop in production capacity in Norway combined with increased uptake by European buyers, mostly in France, ahead of scheduled maintenance on the French Franpipe pipeline on Friday.
As a result, "significant" storage withdrawals of around 24 mcm - the highest in several weeks - are likely to be required, despite nominations indicating little activity scheduled for Thursday, the analysts added.
Rough, one of Britain's main gas storage facilities, is undergoing full maintenance until Sept. 25.
However, Friday's Franpipe maintenance should provide more supply for Britain, alleviating near-term shortfall concerns.
Poland on Wednesday and Thursday said it was receiving less gas than normal from Russia, but the news failed to affect prices as data showed the reduction had been experienced at the beginning of September and that current daily Polish imports through Belarus and Ukraine were stable.
"The market was unconcerned, trading instead on a relatively balanced market amid a small volume of net storage withdrawals," Point Carbon analysts said, adding that prices remained sensitive to developments between Ukraine and Russia, especially a breakdown of the current ceasefire.
Ukraine has not received Russian gas since June 16, meaning Ukrainian gas inventories are significantly below last year, threatening the secure transit of gas to the EU this winter.
"Unless a full-fledged agreement is reached and gas flows to Ukraine are restarted, price movement is more likely to be to the upside," the analysts said.
Meanwhile, temperatures across Britain are expected to rise above seasonal norms from Sept. 12, meaning demand could dip back towards summer levels.
Day-ahead baseload power prices dropped by 2.90 pounds or 6.7 percent to 40.50 pounds per megawatt-hour.
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