Prompt and curve prices continued to slide down on the UK gas market midday Tuesday as demand remains well below seasonal norms and crude oil contracts carry on with bearish sentiment due to macroeconomic growth concerns.
"It is a similar picture to Monday on the UK NBP with nothing changing on a fundamental basis," a trader said.
Both within-day and day-ahead gas contracts fell by about half a penny on market close Monday to 51.15 pence a therm and 51.30 p/th, respectively.
The UK gas system lost some length from the previous day but is comfortably balanced.
According to data from National Grid, the system was operating 5 million cubic meters long at 207.2 million cu m/day by noon London time. Normal seasonal demand is 231.6 million cu m/day.
Supplies from the key gas pipeline, Langeled, weakened overnight. For much of Monday it was pumping about 50 million cu m/day but is averaging around 35 million cu m/day Tuesday.
Gas is still not flowing on the Seal pipeline into the Bacton processing plant after shutting for maintenance early Sunday, July 31, morning. Last week it was pumping about 18 million cu m/day.
LNG flows remain strong with the South Hook terminal flowing about 35 million cu m/day and the Isle of Grain terminals increasing supply from about 20 million cu m/day Monday to almost 40 million cu m/day at midday Tuesday.
The new front-month contract, September, lost half a penny day-on-day and is trading at 50.85 p/th at midday Tuesday.
Curve contracts, feeling the weight of economic uncertainty, have slid day-on-day between 0.30 p/th and 0.60 p/th.
Crude oil, a key driver for gas, fell to $116.64/barrel by 1200 London time, down $0.17/b day-on-day.
Q4 11 fell to 66.60 p/th, down 0.55 p/th on the day and winter 11 saw the largest curve loss, falling 0.60 p/th to 69.80p/th.
Summer and Winter 12 lost 0.30 p/th, respectively, falling to 65.45 p/th and 75.45 p/th.
The Lijmiliya is to berth at the South Hook LNG terminal on Sunday August 7 from Qatar, according to local port data.
