UK day ahead gas price pushes up on industrial demand

British spot gas prices fell on Friday as supplies outpaced demand for a second straight day, while gas for weekend and Monday delivery rose in expectation of slightly higher demand.

The price of gas for immediate delivery fell 0.9 pence to 65.60 pence per therm on Friday thanks to an oversupplied transmission system, while Monday gas rose half a penny to 66.35 pence.

Monday gas demand was revised 5 million cubic metres higher by analysts at Thomson Reuters Point Carbon on Friday, because of expected increased demand from industrial users.

The analysts also expect Norwegian flows via the Langeled pipeline – Britain’s key gas supply route – to shut down from Saturday owing to maintenance at the Kollsnes gas processing plant which feeds the pipe.

In parallel with the shutdown at Norway’s Kollsnes plant, the receiving terminal for Norwegian gas in the UK at Easington will also shut for planned works. Demand for gas was estimated at 134.3 mcm/day with the system oversupplied by 6 mcm.

Mild weather has dampened demand for the heating fuel and ample supplies from mainland Europe and Norway helped reduce liquidity, traders said.

Gas flows through the Langeled pipeline from Norway to Britain steadied at 25 mcm/day, while flows from the South Hook liquefied natural gas terminal in Wales added 15 mcm.

This week, North Sea maintenance has helped keep prices firm, at some points leaving the system tight at a time when utilities are trying to refill their storage facilities.

Maintenance at Forties Charlie and Unity Riser ended on Tuesday but there has been no increase in flows to St. Fergus terminals so far, Point Carbon said.

Further along the curve, gas for season-ahead delivery was dropped by 0.10 pence to 71.15 pence per therm.