LONDON: Prompt wholesale natural gas prices in Britain ticked up on Tuesday morning on a slightly undersupplied system, while the back end of the curve fell as traders sold following a price rally.
Day-ahead British gas prices inched up by 0.30 pence to 38.50 pence per therm by 0808 GMT. Gas for immediate delivery was up 0.80 pence at 38.30 pence per therm.
Britain's gas system was slightly undersupplied on Monday morning. Demand was forecast at around 145.8 million cubic metres (mcm), while flows were seen at 144.0 mcm/day, according to National Grid data.
Flows from the UK Continental Shelf and Norway's Langeled pipeline were largely flat but supplies through the BBL pipeline from the Netherlands were lower.
Liquefied natural gas sendouts were also lower than at the start of the month.
On the demand side, stormy weather boosted wind power output, curbing the consumption of gas for power generation, said Marina Tsygankova, analyst at Thomson Reuters Point Carbon.
"We might see an increase in CCGT (combined cycle gas turbine) consumption around Thursday/Friday when windy conditions are forecast to calm down," she added.
Further along the curve, prices fell.
Gas for delivery in September declined by 0.75 pence to 41.00 pence per therm and the winter 2014-15 contract dipped by 0.50 pence to 60.50 pence per therm.
Contracts had firmed on Friday and Monday on concerns that possible transit sanctions by Ukraine against Russia could affect the supply of gas to Europe.
However, traders were now taking profit after Ukranian oil and gas company Naftogaz said on Monday it would continue uninterrupted supply of Russian gas exports to Europe through its territory even if Ukraine imposes its own sanctions on Russia.
The Ukrainian parliament is due to debate possible sanctions against Russia on Tuesday.
POWER FALLS
In Britain's power market, day-ahead baseload power (24 hours) climbed by 2.40 pounds to 37.40 pounds per megawatt-hour as 2.3 gigawatts (GW) of nuclear capacity was offline.
EDF Energy has taken two nuclear reactors offline so far this week for inspection after a crack was detected on a boiler spine of a similar reactor which was already on an outage for refuelling.
Another 610 MW reactor is due to be taken offline on Wednesday, which will bring total unavailable nuclear capacity to 2.9 GW, which is almost a third of Britain's total nuclear capacity.
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