Gas plunges in UK as key pipeline link to shut
LONDON (Reuters) — Prompt gas prices in Britain fell sharply on Tuesday as a major gas pipeline with mainland Europe prepared to shut, trapping surplus gas in the UK until June 29.
British within-day gas price was down by 1.40 pence at 33.70 pence/therm at 1006 GMT.
Day-ahead gas fell 2.65 pence or 7.49% to 32.75 pence per therm in response to the shutdown of the Britain-Belgium gas link due on Wednesday, coupled with lower forecast demand at that time.
The pipeline shutdown for annual maintenance until June 29 is the main bearish driver because it removes a key outlet for Britain to export surplus gas, traders and analysts said.
Despite falling prices, the gas system is undersupplied by 9.9 MMm3, with demand forecast at 190.6 mcm and flows at 180.7 mcm/day, National Grid data showed.
Falling deliveries from Norway through the Langeled pipeline to 18 MMm3/day from around 34 MMm3 on Monday left the system facing shortfalls.
One trader said low gas prices would likely fuel demand by gas-fired power plants during the weekend. Higher forecast wind farm output on Thursday and Friday could constrain gas-for-power consumption, he added.
Reporting by Oleg Vukmanovic, editing by David Evans
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