Prompt prices on the European gas markets declined sharply on Thursday on expectations for further warm temperatures on the continent and a well-supplied UK NBP system, traders said.
Day-ahead gas contracts on the Dutch TTF trading hub by midday was down at Eur23.75/MWh, losing 35 euro cent from the previous day. The day-ahead gas on the NetConnect was at Eur23.90/MWh, down 65 euro cent on the day, while the German GASPOOL day-ahead gas contract lost half a euro on the day and was trading at Eur24.05/MWh.
"Prices were very weak. The NBP system is long and the Ormen Lange outage was over," one trader said, adding that gas flows via the Dutch-UK BBL pipeline reduced to zero but failed to push prices higher on strong LNG supplies and warm weather conditions.
Soaring temperatures is likely to increase demand for power and gas for gas-fired power plants, the trader said, but added that there was no significant rise in utilities gas demand.
According to CustomWeather, London could witness temperatures 4 degrees Celsius above the norm over the weekend. The temperature in Amsterdam and Paris is likely to be 4-6 C above the seasonal norm for the same period.
Gascco operated Nyhamna plant, which processes gas from Ormen Lange gas field, was halted on Wednesday, affecting 35 million cubic meters of gas but resumed operations late night, resulting in increased Norwegian gas exports into the UK.
The UK NBP system was 6.7 million cu m long with forecast demand at 171.1 million cu m of gas by midday Thursday, National Grid data showed.
Meanwhile, the French PEG Nord day-ahead gas slumped to Eur23.85/MWh by midday Thursday, down 75 euro cent on the day, while the PEG Sud prompt gas was down at Eur24.90/MWh, shedding 60 euro cent from the previous day. On the curve, the September gas contract on the TTF changed hands at Eur24.60/MWh, down 10 euro cent on the day, while the Cal 13 gas moved up slightly to trade at Eur27.60/MWh, up 10 euro cent from the previous day.
