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UK GAS: Prices stable as fluctuating flows cause uncertainty

https://www.chemnet.com   Aug 06,2010
UK gas prices were fairly stable in an uncertain market Thursday with the system short on gas due to fluctuating flow rates, traders said.


The day-ahead contract was changing hands at around 44.10 pence/therm by 12:00 London time, 0.15 p/th below Wednesday's close, while within-day rebounded from around 43.40 p/th at open to 44.50 p/th by midday, up 0.30 p/th on the day.


"Prices looked softer this morning on the open, but as the system has gone shorter the price has rebound to where we were yesterday," one trader said.


"The shortness seems to be because of infrastructure flows, with Langeled all over the place lately and LNG flows slightly erratic," he added.


National Grid showed supplies for the day at 189 million cu m/d early on,while demand was pegged at 212 million cu m/d. Seasonal normal demand is currently 216 million cu m/d.


All three UK LNG import terminals were running, but were supplying around 10 million cu m/day less than Wednesday in total at 35 million cu m/d.


The Qatari tanker Mesaimeer is due to arrive Thursday at South Hook and the Methane Shirley Elisabeth from Trinidad & Tobago at Dragon on Saturday,while another shipment has also been rumored for delivery on Monday.


Langeled flows were running at a rate of 40 million cu m/d, unchanged on the day, while maintenance work at St Fergus has stopped Norwegian flows to the UK through Vesterled for around 20 days in August.


Maintenance has also restricted output at some other terminals, with flows into Bacton SEAL more specifically remaining out of action.


On a more positive note, supply seemed to be sufficient to cope without the expensive Aldbrough storage Thursday after being turned on to 10 million cu m/day rates Wednesday to boost supply.


CustomWeather indicated temperatures in London will remain 4 degrees Celsius below the seasonal average for this time of year Thursday, in a range of 10-20 C, but will rise slightly by the weekend.


Gas for Winter 10 delivery was trading 0.65 p/th below Wednesday's close at 50.60 p/th at 12:00 London time.
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