LONDON: Natural gas prices in Britain dropped on Wednesday as fresh LNG supply loomed and imports from the Netherlands were higher than expected, traders said.
Day-ahead prices fell 2.6 percent to 41.50 pence/therm, while the front-month and winter 2014 contracts lost 2.2 percent and 1.5 percent respectively.
"BBL flows are nominated at 5 mcm (million cubic metres) but have been very active this morning, delivering around 16 mcm/day," analysts at Thomson Reuters Point Carbon wrote, referring to the pipeline between Britain and the Netherlands.
"It makes it hard to judge total flows for today and our balance indicates flow being higher than nomination though lower than current rates, indicating that the pipeline may halt deliveries altogether at some point in the day," they added.
BBL is scheduled to shut for annual maintenance from Aug. 25-29, returning on Aug. 30. During this period flows are expected to be zero, returning to around 8 mcm/day thereafter.
The analysts also noted high liquefied natural gas (LNG) sendout nominations at 47 mcm, as well as two tankers due to arrive in Britain this week with a combined capacity of 466,000 cubic metres.
When the LNG is turned back into gas, the volume is over 279 mcm, which is equivalent to 1.6 times Wednesday's gas demand.
Britain's gas system was balanced, with forecast demand and supply at around 178 mcm.
Traders said "comfortable" supply levels were also weighing, as prices further down the curve fell on an easing of concerns over Russian gas supply via Ukraine.
Meanwhile, temperatures across Britain are poised to remain below seasonal averages until Aug. 25.
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