Prompt prices on the UK NBP gas trading hub continued to fall Tuesday morning on persistent warmer-than-average weather and strong stocks which reduced both domestic and Continental demand, while the curve fell with coal and oil prices.
The within-day gas contract was trading at 58.70 pence/therm at midday Tuesday, down by 1.40 p/th from Monday's market close, while the day-ahead contract lost 0.45 p/th at 58.50 p/th.
"Demand has dropped due to mild weather and lower exports to the Continent," an analyst said.
Customer nominations for gas exports from the UK into Belgium on the Interconnector (IUK) pipeline were 11.12 million cubic meters -- the lowest figure since March, excluding the September maintenance period which closed the pipeline.
"Like the UK, it's warm and storage is full [in the Continent] -- there just isn't the demand," a trader said.
In the UK, gas demand was about 50 million cu m below seasonal norms Tuesday, at 230.5 million cu m, but the system spent the morning short -- by 9 million cu m at noon.
"The system opened up 10 million cu m short on a drop in supply from LNG terminals, lower imports through the Bacton BBL and Langeled remaining subdued at 36 million cu m," the analyst said. "Storage levels remain high at 96.2% as only 4 million cu m of gas was extracted yesterday despite the short system."
The new front month, December, fell by 0.30 p/th to 66.55 p/th.
Meanwhile, the front quarter and seasons weakened in line with other commodity markets which turned bearish on doubts about the bailout agreed last week for Greece.
"Greek Prime Minister George Papandreou has announced that he will call a referendum on whether to accept the European finance deal agreed last week, more than 60% of Greeks are against the austerity measures according to opinion polls," an analyst said.
Q1 12 was changing hands at 68.35 p/th, shedding 0.40 p/th from the previous session's close.
Summer and Winter 12 lost about 0.70 p/th each, at 60.75 p/th and 70.95 p/th, respectively. Summer 13 dropped by 0.80 p/th to 62.60 p/th.
