LONDON: British prompt gas prices fell on Tuesday on rising supply confidence and expectations that warm weather is due to further erode demand, while forward contracts firmed on stronger crude oil prices.
Gas prices for instant delivery fell 0.15 pence to 64.95 pence per therm at 1000 GMT Tuesday, while Wednesday gas also traded 0.15 pence lower, at 64.55 pence.
The drop reflects a rise in temperatures on Tuesday and Wednesday which is depressing already low summer demand for gas, traders said.
Temperatures in southern England are expected to top 28 and 27 degrees Celsius on Tuesday and Wednesday, respectively, before steadying at around 25 degrees for the rest of the week.
The weather-driven drop in demand outweighed bullish factors such as an undersupplied transmission network after ConocoPhillips' Theddlethorpe gas terminal suffered an unplanned outage earlier this morning.
Around 6 million cubic metres/day of gas supply was lost as a result of the shutdown, flow data on National Grid showed.
Imports from the Netherlands rose to 6 mcm from zero overnight, however, helping offset some of the losses from Theddlethorpe, while Norwegian supplies remained stable.
Liquefied natural gas (LNG) terminals pumped out around 14 mcm of gas, similar to levels earlier this week.
Further forward, gas for delivery next winter rose 0.10 pence to 70.60 pence on the back of stronger crude oil prices, up to $115/barrel following reports that two ballistic "objects" were fired in the eastern Mediterranean.
The news spurred an oil price rally amid concern by traders over the impact of possible air strikes against Syria.
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