LONDON: British spot gas prices traded at their lowest since September 2010 on Monday morning as healthy supplies clashed with low summer demand and high storage levels following a mild winter and spring.
Gas prices for delivery the next working day traded as low as 35.00 pence per therm, their weakest since touching 33.45 pence per therm on Sept. 20, 2010.
By 0812 GMT the contract was trading at 35.10 pence per term, down 1.30 pence on Friday's close.
Traders said the weak prices resulted from low demand following unusually mild weather in Britain since last autumn, coupled with healthy supply after the return of the St Fergus gas terminal and available liquefied natural gas (LNG) supplies.
The St Fergus terminal, which went into an outage of 10 million cubic metres (mcm) per day on May 30, resumed gas supplies in the afternoon of July 4.
When functioning fully, St Fergus delivers an average of 21 percent of Britain's daily gas demand, according to operator Total's website.
Supply flows into Britain at about 186.4 mcm per day on Monday were expected to match demand of about 186.1 mcm, National Grid data showed.
LNG supplies coming into Britain remain steady, with three tankers expected to arrive by July 14.
WINTER HITS NEW LOW
Gas for delivery in the winter 2014/2015 season fetched 54.95 pence per therm at 0812 GMT, 0.98 pence below its last close and the lowest since the contract began trading in 2011.
Traders said the contract's value has plummeted due to higher-than-usual gas storage, providing a cushion for potential winter supply disruptions.
"At the moment we aren't really seeing a floor and with the storage sites as full as they are, there is certainly potential for the contract to go lower," a gas trader said.
The contract is down almost 25 percent compared with prices at the beginning of the year.
Britain's gas storage sites are more than 80 percent full compared with around 30 percent this time last year, according to Gas Infrastructure Europe data.
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