LONDON: British gas prices fell across the board on Wednesday morning as high pipeline imports from Norway, Europe and the North Sea outstripped demand, outweighing concerns over infrequent liquefied natural gas (LNG) deliveries from Qatar.
The UK's oversupplied gas market pulled day-ahead prices nearly half a penny lower to 67.70 pence a therm, while gas for weekend delivery fell 0.70 pence to 68.50 pence.
Britain's gas market was oversupplied by 15 million cubic metres/day (mcm/day), with demand fairly closely aligned with seasonal norms at 229 mcm/day.
Imports from the Netherlands and Belgium topped 50 mcm/day largely because the UK's 1.8 pence/therm premium over continental prices encouraged utilities to sell more gas to Britain.
"The spread with Belgium's Zeebrugge gas hub has widened partly because of a discrepancy in LNG deliveries," a UK gas trader said.
Britain's intake of LNG has dropped sharply over the past month, while Belgium has continued to receive regular shipments, driving prices in different directions at their respective hubs and enabling imports from Belgium to Britain.
Qatar, which supplies the vast majority of Britain's LNG, cut deliveries after announcing maintenance work on two production plants in early September.
November gas fell 0.95 pence to 67.55 pence, while the peak winter demand January contract lost just 0.35 pence at 69.45 pence.
Norwegian flows to Britain rose by 10.3 mcm to 94 mcm despite lower output from the country's offshore gas processing plant at Kollsness, down by 23 mcm/day, due to compressor problems.
UK Continental Shelf output rose 118 mcm/day from 110 mcm/day during the previous session, flow data showed.
Further forward, the benchmark summer 2013 gas contract ticked 0.45 pence lower to 62.30 pence as the impact of weaker prompt prices held sway over the curve, trumping a rebound in oil prices.
Britain's Met Office predicted a cold spell in around six days' time with widespread overnight frosts expected to boost demand in heating systems.
In the UK power market, day-ahead spot power prices rose 30 pence to 50.55 pounds per megawatt-hour.
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